Colin Skellett, the businessman being investigated by police on suspicion of receiving a bribe, has stepped down as chairman of the rail maintenance company Jarvis.

When this unwinds it will be seen that I did absolutely nothing wrong

Colin Skellett

Mr Skellett told BBC Radio 4's PM programme that he made the move because he thought it would be unhelpful for the publicly-quoted company if he stayed in place while the police investigation continued.

"It's a matter of doing the right thing for the business," he said.

"That doesn't mean I'm some sort of lame duck," he added.

Wessex board gives its backing

The bribery allegation relates to the sale of Wessex Water, where Mr Skellett is employed in his main job as chairman and chief executive.

He said there was no foundation to the bribery allegations and he had no intention of resigning that post.

Wessex is a private company and its board has given Mr Skellett its backing.

Last Thursday he was arrested by City of London fraud squad officers on suspicion of receiving a bribe of nearly £1m when Wessex was sold to Malaysia-based YTL power.

On bail

Mr Skellett said the police told him they wanted to do the thing quietly and not cause any fuss but then he found press releases were being issued.

He has strenuously denied the allegations and has said the £1m payment was a consultation fee.

"I'm absolutely sure that when this unwinds it will be seen that I did absolutely nothing wrong," he said.

Mr Skellett is on bail while the police investigation continues.