British Cabinet Minister David Frost, who led Brexit negotiations under Prime Minister Boris Johnson, has resigned from the government, The Mail on Sunday reported.
The newspaper said Frost would leave his post in January owing to "disillusionment" with the direction of government policy, citing a senior government source.
Johnson's office did not immediately respond when contacted by AFP about the reported loss of a trusted ally, which would deliver another huge blow to the besieged leader.
The weekly paper reported online that Frost handed in his resignation a week ago, but was persuaded to stay on until the New Year.
An unnamed source told the paper that Frost was opposed to the government's new coronavirus restrictions, focus on net-zero climate targets and tax rises.
Johnson is already reeling from a rebellion by 100 of his MPs in a parliamentary vote over coronavirus measures and the stunning loss of a 23,000-majority seat in a by-election.
That was partly blamed on a slew of reports that his staff and aides held parties last Christmas despite virus restrictions in place at the time.
The deputy leader of the main opposition Labour party Angela Rayner said the resignation demonstrated "a government in total chaos right when the country faces an uncertain few week”.
"@BorisJohnson isn't up to the job. We deserve better than this buffoonery," she tweeted.
The foreign affairs spokeswoman for the smaller Liberal Democrats, Layla Moran, said: "This shock resignation is a sign of the chaos and confusion at the heart of this Conservative government.
"The rats are fleeing Boris Johnson's sinking ship as he lurches from crisis to crisis. Even the Prime Minister's once-loyal supporters are now abandoning him."
And Arlene Foster, who stepped down as Northern Ireland's first minister because of post-Brexit trading arrangements in the UK province, said it had huge implications.
"The resignation of Lord Frost from the Cabinet is a big moment for the Government but enormous for those of us who believed he would deliver for NI," she wrote on Twitter.
Frost has been locked in talks for weeks over the so-called Northern Ireland Protocol, which governs trade between the British mainland of England, Scotland and Wales, and Northern Ireland, and with the European Union.
London wants the agreement it signed up just last year to be scrapped, claiming it is not working. But Brussels is opposed.
The by-election loss for Johnson's Conservatives intensified speculation of a leadership challenge, with Frost potentially eyeing a tilt at the top job.
