British Transport Secretary Louise Haigh has resigned after pleading guilty years ago to an offence in connection with misleading police over a work mobile phone, in another blow to Prime Minister Keir Starmer.

Her resignation, the first from Mr Starmer's top team of ministers since Labour's landslide election win in July, came after media reports that she had pleaded guilty to a charge of fraud by false representation in 2014 over what she described as a "genuine mistake".

Ms Haigh said in a letter to Mr Starmer dated Thursday that she had told police a mobile phone was among items she lost during a "terrifying" mugging on a night out in 2013, only to discover later that the phone was still at her home.

The phone belonged to her then-employer, insurance company Aviva, and she received a replacement before finding the old phone and turning it on, which led to an investigation by Aviva and the police.

In the letter, which was shared by Mr Starmer's office early on Friday, Ms Haigh said she was standing down as the issue "will inevitably be a distraction from delivering on the work of this government and the policies to which we are committed".

In response, Mr Starmer issued a short statement thanking Ms Haigh for her work "to deliver this government's ambitious transport agenda", and said he knew she still had "a huge contribution to make in the future".

Hours later, he announced that Swindon South MP Heidi Alexander — a former London deputy mayor in charge of transport — would take on the national transport role.

The opposition Conservative Party said Ms Haigh had "done the right thing" by resigning but asked why Mr Starmer had appointed her when he was apparently aware of her fraud conviction.

"The onus is now on Keir Starmer to explain this obvious failure of judgement to the British public," a spokesperson for the Conservative Party said in a statement.

Ms Haigh's resignation is yet another blow to the Labour leader, who has seen his party's approval ratings plunge since July.

Almost immediately after winning power, his government came under fire for limiting fuel payments to the elderly and for ministers accepting gifts such as clothing and hospitality.

Since then, the government has angered farmers over changes to inheritance tax rules and many businesses have cried foul over Labour's first budget, in which the finance minister raised taxes mainly on firms and the wealthy.

Ms Haigh, who was first elected in 2015 and has held senior posts under both Mr Starmer and left-wing former Labour leader Jeremy Corbyn, said the incident with the phone was a "genuine mistake" from which she "did not make any gain".

Reuters/ABC