EX-POST Office boss Paula Vennells has handed back her CBE "with immediate effect" after more than one million people signed a petition.
Vennells said she will hand back her award amid public fury over the Horizon IT scandal.
Faulty Horizon accounting software made it appear as if money was missing from Post Office branches around the UK.
The faulty IT system led to the wrongful prosecution of hundreds of sub-postmasters.
Vennells, who ran the Post Office while it routinely denied there was a problem with Horizon IT system, was appointed a CBE in December 2018.
More than 1.2million people have so far signed a petition demanding she hand back the gong after an ITV drama put a spotlight on the scandal.
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A Government source said Paula Vennells effectively handing back her CBE was "the right thing to do".
Downing Street had previously said Prime Minister Rishi Sunak would "strongly support" the Honours Forfeiture Committee if it decided to look at stripping the award.
And Post Office minister Kevin Hollinrake had said she should consider voluntarily giving up the honour.
Varchas Patel's father Vipin who was wrongfully convicted of fraud in 2011 after being accused of stealing £75,000 from his Post Office branch in Oxford.
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Patel said: "My initial reaction is good, I'm glad. She doesn't deserve that CBE, she never did deserve that CBE.
"It's not just Paula Vennells, there are others. There are in-house Post Office lawyers, and especially the in-house investigators who investigated the likes of my father and others."
Jailed sub-postmaster Janet Skinner had also called on Vennells to be stripped of her CBE as she revealed in The Sun how she was wrongly imprisoned and lost her home and health in the scandal.
In a statement, Vennells said: "I continue to support and focus on co-operating with the inquiry and expect to be giving evidence in the coming months.
"I have so far maintained my silence as I considered it inappropriate to comment publicly while the inquiry remains ongoing and before I have provided my oral evidence.
"I am, however, aware of the calls from sub-postmasters and others to return my CBE.
"I have listened and I confirm that I return my CBE with immediate effect."
A person cannot technically hand back their CBE, although they can act as if they were never awarded it.
King Charles will need to formally annul the honour under advice of the Forfeiture Committee.
The forfeiture will then be recorded in the London Gazette.
Vennells added: "I am truly sorry for the devastation caused to the sub-postmasters and their families.
"Their lives were torn apart by being wrongly accused and wrongly prosecuted as a result of the Horizon system.
"I now intend to continue to focus on assisting the inquiry and will not make any further public comment until it has concluded."
CRUNCH DEADLINE
It comes as around 1,000 people affected by the Horizon scandal face a looming tax deadline.
Sub-postmasters and other people who received compensation from the Horizon Shortfall Scheme in the 2022/23 tax year will need to declare the payments before January 31.
HMRC said: "We've now published guidance and set up a dedicated helpline.
"We can reassure any postmasters struggling to meet the deadline for filing their return and paying their tax because of a late top-up payment.
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"Any penalties and interest associated with this will be cancelled."
The Insolvency Service said today that it is still helping people affected by bankruptcy as a result of the scandal.