Alan Duncan, the Shadow Business Secretary, has resigned his position as non-executive director of a British environmental company, just a day after David Cameron, the Conservative party leader, shelved a plan to make his shadow cabinet quit their second jobs.

Mr Duncan said he was resigning from Catalytic Solutions, a British maker of devices to reduce car exhaust fumes, after two years to spend more time working as an MP for Rutland and Melton and as Shadow Secretary of State for Business, Enterprise and Regulatory Reform.

Mr Duncan’s resignation provides a further blow to Catalytic Solutions, which is already suffering from the economic downturn, which has hit the motor industry particularly hard.

The company, which also makes so-called emissions control systems for products such as industrial boilers and gas turbines, issued a profits warning yesterday, blaming the “significant reduction” in sales in the car industry.

Catalytic Solutions said it expects revenues for both 2008 and 2009 to come in about 17 to 20 per cent below previous expectations.

Mr Cameron was considering making his 31 person front bench team, who earn £60,000 apiece, give up any outside jobs on concerns that it would look greedy during a recession. However, the threat of an internal revolt caused him to change his mind.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive