Conservative MP Tim Yeo is to stand aside as chairman of a committee while claims he used the role to help a private company influence Parliament are being investigated.
The MP rejects suggestions he coached a businessman employed by a firm with which he has financial links on what to say in evidence to the committee.
But Mr Yeo said he did not want the probe to "distract" its work.
Labour had said it was "difficult to see" how Mr Yeo could have continued.
Mr Yeo, chairman of the Commons Energy and Climate Change Committee, was secretly filmed by Sunday Times investigators posing as representatives of a fictional energy company seeking to hire his services.
In the recording, he appears to suggest that he told a businessman what to say to his committee before the businessman appeared before MPs last month.
At the meeting, Mr Yeo publicly excused himself from questioning GB Railfreight managing director John Smith because of his acknowledged conflict of interest as a non-executive director and shareholder in its parent firm Eurotunnel.
Mr Yeo's work for the company is declared in the MPs' register of financial interests and he mentioned it at the start of the committee hearing into the bio-energy industry.
Excerpts from The Sunday Times secret recording
But in the secret recording, the MP claims what he did for GB Railfreight "in private was another matter altogether" and he "was able to tell him (Mr Smith) in advance what he should say".
Mr Yeo, who has referred himself to the parliamentary standards commissioner, has said he had chatted briefly with Mr Smith five days before the hearing during a visit to one of the firm's freight trains.
But he has "absolutely and unreservedly" denied the suggestion that he had told him what to say.
The BBC's political correspondent Chris Mason said momentum had been building for Mr Yeo to step aside ahead of a meeting of the committee on Tuesday - with Labour making it clear they would no longer support him.
In a statement, Mr Yeo said he had taken the decision to temporarily relinquish his post "solely to ensure the smooth running of the committee during the next few weeks".
He added: "I firmly believe that I have not breached the MPs' code of conduct in any respect and therefore await the outcome of the commissioner's investigation with confidence.
"I do not wish the commissioner's investigation to be a distraction from the committee's important work. I believe that during the past three years the committee has been extremely effective and I want this to continue."
Before Mr Yeo made the announcement, Labour said he was facing "serious" questions about his conduct and allegations that he had "used his position to further the interests of his clients".
"Tim Yeo has the right to defend himself but it is difficult to see how he can continue as chair of the select committee pending investigation by the Parliamentary Standards Commissioner," shadow Cabinet Office minister Gareth Thomas had said.
Eurotunnel is the sole owner of GB Railfreight, having bought the firm in 2010.
Mr Yeo and other select committee chairmen are elected to their posts by other MPs for the duration of Parliament.
They receive a supplementary payment of £14,728 in addition to their MP's salary of £66,396.
The allegations come amid calls for a tightening of the rules around lobbying of ministers and MPs to ensure greater transparency, with the government promising to bring forward legislation in the coming weeks.
Source: BBC news.