In a written statement to the Prime Minister and released just short time ago to the media, Mr Fitzgibbon, who is also the Member for the NSW seat of Hunter, announced he would resign his portfolio.

It follows more revelations, this time in Senate Estimates about an inappropriate meeting between defence personnel, Mr Fitzgibbon's brother, and a US health firm his brother was representing.

In his letter, Mr Fitzgibbon said that having read the transcripts of proceedings last night about the nature of the contact between Humana, his brother and his office, he was not satisfied that the contact between the various parties left it clear that he had entirely conformed with the Prime Minister's ministerial code of contact.

He said on that basis, and to protect the integrity of the Government, he had decided to resign as a member of the executive, effective immediately.

It is the first ministerial scalp in the Rudd Government.

The estimates revelations follow those earlier this week that Mr Fitzgibbon did not declare accomodation paid for by health care fund, Nib, of which his brother is in charge.

Earlier this year Mr Fitzgibbon was called into question over his friendship with a Chinese businesswoman, and flights provided by her.

A scandal over a defence payment bungle also put the Minister under significant pressure.

Prime Minister Kevin Rudd described Mr Fitzgibbon as a "first class" defence minister, but he said the Government expects high standards of accountability from all ministers.