He will step down on Wednesday after more than six years as the Government's most senior law officer. During that period, he has faced a succession of controversies, being most memorably cast into the spotlight in the run-up to the Iraq war four years ago.

With days to go to the planned invasion and arguments raging over whether it could be justified under existing United Nations resolutions, Mr Blair asked the Attorney General for his advice on the legality of the war.

In a memo to the Prime Minister on 7 March, 2003, Lord Goldsmith warned that some courts could require further approval from the UN security council before any military action could begin.

Ten days later, in his final advice to the Government, he came to the unequivocal conclusion that the use of force was justified. He faced accusations of coming under political pressure to change his view, a charge he has always strongly denied.

Within days of presenting his opinion, British troops were sent into action in Iraq alongside American forces.

He faced more uncomfortable publicity when he refused to step aside from involvement the cash-for-peerages investigation, although he could have been left in the position of deciding whether to approve the prosecution of Downing Street aides.

Recently, Lord Goldsmith has also been forced to defend his decision to instruct the Serious Fraud Office to abandon its investigation into allegations of corruption in BAE arms sales to Saudi Arabia. The move followed a warning from Tony Blair that the Saudis were threatening to break off intelligence and security co-operation.

Announcing his decision to step down, Lord Goldsmith, 57, said in a statement: "I have been immensely privileged to serve in this office for just over six years.

"This is a record time for a Labour Attorney General. It has been an extremely interesting and challenging time.

"However, I have wanted for some time to move on and I have told the Prime Minister and the Chancellor I believe now is the right time to make that move."

In his statement he highlighted his achievements in office: "I am proud to have been a part of making major achievements in criminal justice and take especial pride in the great progress made in the prosecuting authorities.

"It is a particularly appropriate moment for me to move on as there has been independent validation today of the huge and beneficial changes in the Crown Prosecution Service following the vision I set out six years ago."

He said the CPS was on an "irreversible track to become the world class prosecuting authority I first called for in 2001".

Chancellor Gordon Brown, who is preparing to become Prime Minister , said last night: "Peter Goldsmith has given outstanding service to Britain.

"His contribution to the country and this Government has been immense, not least through transforming the Crown Prosecution Service. It is with my regret that he has made his personal decision to step down."

Lord Goldsmith, who was appointed by Tony Blair in 2001, is the third minister to announce they will be leaving the Government when the Prime Minister leaves Downing Street, following the planned resignations of John Reid as Home Secretary and Hilary Armstrong as Minister for the Cabinet Office and Social Exclusion.

The Liberal Democrat President and legal spokesman Simon Hughes said: "Lord Goldsmith will go down in history as one of the most controversial Attorney Generals in post-war British politics.

"He will always share responsibility for the decision to invade Iraq and to drop the investigation into alleged corrupt dealings between BAE and the Saudi government in connection with Britain's biggest ever defence contract.

"If Gordon Brown wants to make a clean start, then there must be different procedures for decisions about any future prosecution on cash for honours and there must be new arrangements for the role and accountability of law officers."

Mr Hughes added: "From now on, all future Attorney Generals should take office only if Parliament agrees with the Prime Minister's choice."

Former donor turned life peer

* A former donor to the Labour Party, Peter Goldsmith was made a life peer by the Prime Minister in 1999. Two years later, he was appointed Attorney General, raising eyebrows in some quarters as to whether a peer, rather than an MP, should hold the post.

Married with four children, he was born in Liverpool, educated at Cambridge, and became a QC in 1987. The son of a solicitor, he started out his career by joining Fountain Court Chambers, where he met Charles Falconer, now the Lord Chancellor. He carved out a highly successful career in banking and commercial law.

In 1995, he became the youngest ever chairman of the Bar but was almost unknown outside legal circles before his appointment to become the Government's most senior legal advisor. He is close to the Prime Minister and critics have questioned his impartiality, although Lord Goldsmith has always firmly denied such allegations, most recently when he rebuffed calls from opposition parties to stand aside from the decision over whether prosecutions should be brought in the "cash for honours" affair.

During his tenure, he championed improvements in trial management and increasing prosecutors' powers over what a defendant should be charged with