Louise Haigh has resigned as transport secretary after it emerged she pleaded guilty to a fraud offense a decade ago.
Downing Street has named justice minister Heidi Alexander as her replacement.
Haigh has admitted telling police in 2013 that she had lost her work mobile phone in a mugging, but later found it had not been taken.
She was given a conditional discharge by magistrates, following the incident which happened before she became an MP.
Haigh’s is the first resignation from Sir Keir Starmer’s government and the 37-year-old said her appointment as the “youngest ever” female cabinet minister “remains one of the proudest achievements of my life”.
News of Haigh’s conviction emerged on Thursday evening, in reports by the Times and Sky News.
Haigh issued a statement giving her version of the 2013 incident, which happened when she was working as a public policy manager for insurance company Aviva.
She had reported a “terrifying” mugging in London to police and told them her work mobile phone had been among the items stolen, but later found the handset in a drawer at home.
Turning on the phone “triggered police attention”, she said, she was called in for questioning and advised not to comment by her solicitor before the matter was taken to magistrates’ court for making a a false report to police.
Haigh said: “Under the advice of my solicitor I pleaded guilty – despite the fact this was a genuine mistake from which I did not make any gain.”
Magistrates handed down a conditional discharge – the “lowest possible outcome” – six months before becoming an MP in the 2015 general election.
