Louise Haigh has resigned as Transport Secretary after it emerged she pleaded guilty to a criminal offence related to incorrectly telling police that a work mobile phone was stolen in 2013.

It is understood the incident was disclosed to Sir Keir Starmer when she joined the shadow cabinet.

In a letter to the Prime Minister, she said she is “totally committed to our political project” but believes “it will be best served by my supporting you from outside Government”.

“I am sorry to leave under these circumstances, but I take pride in what we have done. I will continue to fight every day for the people of Sheffield Heeley who I was first and foremost elected to represent and to ensure that the rest of our programme is delivered in full,” she wrote.

In a reply, Sir Keir thanked Ms Haigh for her work to deliver the Government’s transport agenda.

On Thursday evening, Sky News and the Times newspaper reported that Ms Haigh had admitted an offence in 2014 following the incident. She had reported to police the device was stolen when she was “mugged” in 2013.

It is understood that it was a fraud offence and that the conviction is now spent.

Ms Haigh said she discovered “some time later” that the phone had not been taken.

She said the matter was a “genuine mistake” from which she “did not make any gain”, and that magistrates gave her the “lowest possible outcome”.

Ms Haigh has been Sheffield Heeley MP since 2015 and held a number of shadow ministerial and shadow cabinet roles before becoming Transport Secretary when Labour won the election in July. Before she entered politics she spent time as a special constable.

She was working for insurance giant Aviva at the time of the incident, according to the reports.

In her letter to Sir Keir, she wrote: “I gave the police a list of my possessions that I believed had been stolen, including my work phone.

“Some time later, I discovered that the handset in question was still in my house.

“I should have immediately informed my employer and not doing so straight away was a mistake.

“I appreciate that whatever the facts of the matter, this issue will inevitably be a distraction from delivering on the work of this government and the policies to which we are both committed.”

Sir Keir said Ms Haigh had made “huge strides” as Transport Secretary to take the rail system back into public ownership through the creation of Great British Railways and investing £1 billion into vital bus services.

A Conservative Party spokesman said: “Louise Haigh has done the right thing in resigning. It is clear she has failed to behave to the standards expected of an MP.

“In her resignation letter, she states that Keir Starmer was already aware of the fraud conviction, which raises questions as to why the Prime Minister appointed Ms Haigh to Cabinet with responsibility for a £30bn budget?

“The onus is now on Keir Starmer to explain this obvious failure of judgement to the British public.”