Owen Paterson has announced his resignation as MP for North Shropshire, after Boris Johnson made clear he would no longer seek to prevent the former cabinet minister from being punished by parliament for lobbying.

“I will remain a public servant but outside the cruel world of politics,” the MP for North Shropshire said in a statement.

He continued to maintain his innocence, after being found to have repeatedly lobbied the government on behalf of two companies that were paying him more than GBP100,000 a year.

Paterson was facing a 30-day suspension from the House of Commons and a potential byelection, after Boris Johnson withdrew his support from an attempt to protect him.

“The last two years have been an indescribable nightmare for my family and me. My integrity, which I hold very dear, has been repeatedly and publicly questioned,” Paterson said.

He said his children had asked him to leave politics, after what he claimed was the mocking and belittling of his wife’s suicide by “people including MPs”.

“I do not want my wife’s memory and reputation to become a political football. Above all, I always put my family first,” he added.

Downing Street executed a humiliating U-turn on Thursday, less than 24 hours after Johnson whipped his MPs to support an amendment that paused judgment in the Paterson case while the system for policing MPs’ behaviour was overhauled.

After it became clear Labour and the SNP would not participate in the cross-party committee mooted in the amendment, and amid a backlash from Tory MPs, the prime minister changed his mind.

The prime minister said he was “very sad” that Paterson had decided to step down.

“He has had a distinguished career, serving in two cabinet positions, and above all he has been a voice for freedom – for free markets and free trade and free societies – and he was an early and powerful champion of Brexit,” Johnson said in a statement.

“I know that this must have been a very difficult decision but I can understand why – after the tragic circumstances in which he lost his beloved wife Rose – he has decided to put his family first.”

No 10 is expected to table a fresh motion early next week unpicking the effect of Wednesday’s vote. That would have reimposed the 30-day suspension on Paterson.

If 10% of his constituents had signed a recall petition, he could then have faced a potential byelection.

Paterson won his safe Conservative seat in 2019 with a whopping majority of 22,949. He is a former Northern Ireland secretary and committed Brexiter.

The Labour leader, Keir Starmer, responding to Paterson’s resignation, said: “This has been an unbelievable 24 hours even by this government’s chaotic standards.

“Boris Johnson must now apologise to the entire country for this grubby attempt to cover up for the misdemeanour of his friend. This isn’t the first time he’s done this but it must be the last. And Boris Johnson must explain how he intends to fix the immense harm he has done to confidence in the probity of him and his MPs.”

Jacob Rees-Mogg, the Commons leader, announced the government’s abrupt change of heart on Thursday morning, just hours after the business secretary, Kwasi Kwarteng, had been sent out on the media to defend Wednesday’s move.

Rees-Mogg conceded that the manoeuvre had “created a certain amount of controversy” and “conflated the individual case with the general concern” that there was not an appeals process for MPs who felt the punishment they faced was unfair.

Rees-Mogg promised to “bring forward more detailed proposals once there have been cross-party discussions”.

The prime minister’s official spokesman said a vote on suspending Paterson and dissolving the cross-party committee mooted to oversee a review of the standards system would happen “as soon as possible”.

Asked why the prime minister had changed his mind, the spokesman said it was “there was no cross-party consensus and so we’re changing our approach”. He added that “he fully acknowledged the strength of feeling in the house”.

In the UK and Ireland, Samaritans can be contacted on 116 123 or email jo@samaritans.org or jo@samaritans.ie. In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at www.befrienders.org.