Former defence secretary and Conservative MP Michael Portillo is standing down from the board at BAE Systems, Europe's largest defence contractor, amid conflict of interest fears over his work as a political commentator and columnist.

Mr Portillo, who is a regular commentator for the BBC's This Week and writes a column for The Sunday Times, told BAE it was important he should feel free to "speak freely and on any topic", the company said today.

The former MP's contributions to The Sunday Times have included a call for Britain to scrap nuclear weapons because they are no longer necessary, as well as regularly forthright commentaries on the unfolding political situation in the Middle East.

"There is a danger that his views might be thought to represent the position of the company, or alternatively be thought to be at variance with the company's views," BAE said. "Having considered the problem carefully he believes that it can only be resolved by standing down from the board."

Having joined BAE as a non-executive director in Setember 2002, Mr Portillo will stand down from the positions at the beginning of May after the defence group's annual meeting of shareholders.

Dick Olver, chairman of BAE Systems, said; "We truly benefited from Mr Portillo's presence on the board and from his long political experience. We are sorry that his other work makes it difficult for him to continue with us and we wish him well."

As a non-executive, Mr Portillo was paid £45,000 a year for his work at BAE.

Mr Portillo, who latterly was a serious candidate to replace William Hague as leader of the Tory party in 2001, was first elected as the MP for Enfield-Southgate in 1984 and spent time as assistant Tory whip and a junior social security minister before winning a full ministerial portfolio.

Having been both transport and local government minister between 1988 and 1992, he became chief secretary to the Treasury between 1992 and 1994.

Then, he spent two years as defence secretary between 1995 and 1997 - before his humiliating defeat at the hands of new Labour candidate Stephen Twigg as the opposition swept to power under the premiership of Tony Blair.

Having been re-elected as an MP two years later -for Kensington and Chelsea following the death of Alan Clark, Mr Portillo rose again to prominence before failing in his bid to replace Mr Hague. He stepped down as an MP at the last general election but has remained prominent as a media commentator.

Shares in BAE fell 4p to 416p, a fall of nearly 1 per cent and ahead of the market's wider decline. The shares value BAE at more than £13.5 billion.

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