Lord Wakeham, the former Conservative energy secretary denounced by US union leaders because of his involvement in the Enron affair, resigned as chairman of the UK's Press Complaints Commission.

Lord Wakeham has come under sustained fire because of his role as a member of Enron's board - and, more importantly, because he sat on the company's audit committee.

In a statement released on Thursday, Lord Wakeham said he was stepping aside from the PCC to protect it from speculation while an inquiry is conducted into Enron's bankruptcy.

"As chairman of the Press Complaints Commission for the past seven years, I am only too aware of the damage that can be done to individuals and institutions that are thrust into the public spotlight," he said.

"Since the collapse of Enron, I have been unable to make any statement or undertake any interviews on the subject for legal reasons. I am conscious that some see this position as incompatible with the chairmanship of the commission," Lord Wakeham said.

"I am very proud of everything we have achieved at the PCC and do not wish it to be damaged by continuing short-term speculation. I therefore see it as a matter of honour to stand aside temporarily from the chairmanship of the commission until the report of the independent investigating committee of Enron is published and evaluated."

On Wednesday night, the former Conservative energy secretary was denounced by US union leaders who questioned whether he was "fit" to hold company directorships because of his involvement in the Enron affair.

Lord Wakeham is widely expected to face questions from US Senate inquiries into the company's collapse although he has yet to be subpoenaed. He has made clear that he is ready to co-operate with any such inquiries.

On Wednesday, however, having already faced Liberal Democrat demands that he step down from the PCC, Lord Wakeham was attacked by the AFL-CIO, the American trade union federation.

Damon Silvers, head of the federation's legal affairs department, said his union had written to companies of which Lord Wakeham is a director, asking them to consider his role on their boards.

Mr Silvers said: "Unless Lord Wakeham can show something which he hasn't shown thus far, that he took meaningful steps to protect Enron and its investors as the company collapsed, he is really not fit to be a steward of investors' money as a member of the board and he should not be renominated to those positions when his term ends."

Mr Silvers said the Conservative life peer could face civil actions in the US filed by disgruntled investors. "He has been named as a defendant in a number of law suits already brought by shareholders. The audit committee had a particular responsibility here, which was to review the accuracy of the company's financial reports."

Lord Wakeham was paid about £80,000 a year, owned shares in Enron and also received consultancy fees for his advice on European energy opportunities.

His links with Enron, whose board he joined in 1994, were forged during his three years as energy secretary under Margaret Thatcher and John Major, during which time he oversaw electricity privatisation.

In 1990, Enron developed its first big British gas-fired power station contract - on Teesside - in partnership with four soon-to-be privatised electricity companies.

Lord Wakeham, 69, who has a string of directorships, was unavailable for comment on Wednesday and his office was not returning calls.

Meanwhile, Brian Wilson, energy minister, said that Andersen, Enron's auditor, had received about £7.9m of consultancy work from the government last year, which he said was 1 per cent of the total.

In Britain, unions have used the Andersen link to attack the private finance initiative, by focusing on its support for such schemes.