Mark Harper's resignation as immigration minister over his employment of an illegally-working foreign cleaner highlights flaws in the Government's immigration crackdown, critics said.
The Tory MP insisted he had not broken the law but accepted he failed to make sufficiently rigorous checks given his status as the politician in charge of the reforms.
Prime Minister David Cameron said he accepted "with regret" the resignation - which was applauded by all sides at Westminster as a principled decision.
But Labour said it should also prompt a rethink about the effectiveness of proposed new requirements for landlords, employers, bankers and others to verify the status of overseas individuals.
And health campaigners said it underlined the unfairness of expecting NHS staff to police new charges on immigrants for the use of services including accident and emergency care.
Mr Harper had been responsible in the Commons for the Immigration Bill - which among other changes seeks to double the fines on employers who recruit illegal immigrants to £20,000 per case.
He said it was that role which led him to double-check the right to work in the UK of his cleaner of seven years with immigration officials - who informed him on Thursday that she was here illegally.
"Although I complied with the law at all times, I consider that as Immigration Minister, who is taking legislation through Parliament which will toughen up our immigration laws, I should hold myself to a higher standard than expected of others," he told Mr Cameron in his resignation letter.
Mr Cameron said it was a typically "honourable" decision by Mr Harper, the MP for Forest of Dean and that he hoped to see him make a return to the ministerial ranks "before too long".
He has been replaced as Immigration Minister by James Brokenshire.
Mr Harper said he took copies of the cleaner's passport and a Home Office letter stating she had indefinite leave to remain in the UK when he took her on to clean his London flat in 2007.
He expressed regret that he did not check their veracity with officials either when he was appointed a cabinet office minister in 2010 or took on the immigration brief at the Home Office in 2012.
Prompted to do so by being put in charge of the legislation - which doubles the fine for employers caught taking on an illegal worker to £20,000 - he was unable to find the documents, he said.
When the cleaner produced new copies, he passed them to immigration officials who informed him that the woman should not in fact be in the country.
His admission that he was not in possession of the papers raised suggestions - rejected by officials - that he could be liable to a fine.
In 2009 the then Attorney General Baroness Scotland was fined £5,000 over her hiring of an illegal immigrant as her housekeeper - under a law she had helped develop.
The Labour peer apologised for the "technical breach" of failing to take copies of the documents shown her by the woman and was allowed to keep her job by then prime minister Gordon Brown.
Shadow immigration minister David Hanson said: "As immigration minister he has argued in Parliament for landlords to be required to carry out checks on every tenant, and he is responsible for the helpline for employers to ring up to double-check the immigration status of their employees.
"We have called for the landlord scheme to be piloted, and the employer helpline to be better resourced exactly because this can be complex for employers and landlords."
"He has shown himself to be a decent man in his resignation and I wish him well for the future but perhaps once again the Government need to think very carefully about how they approach this issue as it's clear there are limits to the effectiveness of relying on employer and landlord checks to address illegal immigration."
The National Health Action Party - formed by health professionals concerned about NHS reforms - also seized on the case to highlight concerns about the legislation.
"Doctors,nurses and receptionists don't have the time or skills to also act as immigration officers," European elections candidate Dr Louise Irvine said.
"Mark Harper himself has shown up the difficulties of checking immigrants and the flaws in implementing such a policy."
Home Secretary Theresa May praised Mr Harper as an "excellent" minister who could be "proud of the role he has played in sharply reducing immigration to Britain".
The MP was severely criticised recently for spearheading the Government's "go home" ad van warning to illegal immigrants - which was later abandoned amid an outcry.
Mr Harper said he had been "mindful of my legal and financial obligations" when he took on the cleaner and sought verification of her immigration status despite having no legal requirement to do so.
On the requirements imposed on employers by the Immigration Bill, he pointed out that "we do not require them to be experts or spot anything other than an obvious forgery".
In a limited reshuffle following Mr Harper's departure, Karen Bradley moved from the whips office to the Home Office to fill Mr Brokenshire's junior ministerial post.
John Penrose was promoted within the whips office to replace Ms Bradley and Harriet Baldwin was brought into the Government ranks as a junior whip.
Mr Cameron has faced Labour attacks in recent days over his failure to promote women.
Communities Secretary Eric Pickles said Mr Harper would not have been caught under the "reasonably light-touch" new legislation.
"I was really sad to see Mark go. He has been a strong minister," he told BBC1's Andrew Marr Show.
"H ad he been a member of the public, I don't think he would have done anything wrong. But he set himself a very high standard and he failed that standard and, therefore, honourably, stood down."
"The new legislation is reasonably light-touch. If this had been a member of the public they would have done nothing wrong."
John Penrose, Tory MP for Weston-super-Mare, told Murnaghan on Sky News it was refreshing that Mr Harper had stood down on a point of principle after recognising the mistake.
On the policy, he said: "We're going to have to make sure it is practical and easy enough for people who take sensible precautions to be OK.
"We can't be asking people to do impossible things but if it's sensible precautions that's what we've got to get to, that's what we've got to check."
Liberal Democrat Tessa Munt, a House of Commons aide to Business Secretary Vince Cable, also told Sky it was "utterly honourable" that Mr Harper had fallen on his sword.
She said: " I do wonder... if he can't work out the system, how on earth anybody else is meant to, I do not know."
Ukip leader Nigel Farage said Mr Harper was left with "no choice" in quitting.
"After all he was the guy behind what I thought were those rather unpleasant vans driving around London saying 'if you're an illegal the time has come to go home', so he had no choice," Mr Farage said.
"It rather sums up the very bad few weeks the Government has had with the question of immigration and what a mess the whole thing is."
Mr Farage, who was speaking during a visit to the flood-hit Somerset Levels, said that he disagreed with the Government putting the onus on an employer to check the immigration status of someone they were employing.
"I think we should have a Border Agency that does that work and makes sure that people that come into this country should be here or shouldn't be here," Mr Farage said.
"I also think we need a more robust system that allows us, for example, to deport foreign criminals, which is what the row in Parliament was about a few weeks ago."