Baroness Buscombe, who has been chair of the PCC since 2009
In a statement released today, Buscombe, who took up the role in 2009, announced that she would not seek to stay on as chair after the end of her term in March next year.
The PCC confirmed today that she will stay on only until a replacement is found, which could mean she will leave within the next few months.
Buscombe was forced to defend the PCC repeatedly over recent weeks in the wake of revealtions about phone hacking at News International. A report published by the watchdog in November 2009 cleared the News of the World of systemic wrongdoing, corroborating News International's claim that hacking was confined to one rogue reporter, royal correspondent Clive Goodman, and concluding there was "no new evidence" to suggest it went further.
The report also found the PCC had not been misled by News International in its original phone-hacking inquiry in 2007, and criticised the Guardian, which had prompted the 2009 report with its renewed coverage of the scandal, claiming its stories "did not quite live up to the dramatic billing they were initially given".
Buscombe has since defended the PCC's handling of the situation, admitting the body was misled by News International and citing this in its defence, claiming it was not in full possession of the full facts when it made its report.
In a statement announcing her resignation today, Buscombe said: "I am very proud of my work at the PCC, which - from the very beginning - has been aimed at instigating the process of reform of the organisation. This included a Governance Review in the course of which I decided to make a number of internal improvements and the introduction of revised procedures in regard to the Editors' Code. This was always intended to be a springboard for further reform."
Outlining "three clear messages" concerning the future of the regulatory body, Buscombe called for the PCC to be strengthened, calling for "the existing work of the PCC to continue and be built upon".
She added that she was "convinced" that statutory regulation of the press was not the answer.
"What is needed is a greater sense of accountability among editors and proprietors. A PCC with increased powers and reach remains the best way of achieving that."
Speaking earlier this month, Labour leader Ed Miliband said that the PCC had become a "toothless poodle" and called for it to be scrapped completely.
"Wherever blame lies for this, the PCC cannot restore trust in self-regulation. It is time to put the PCC out of its misery. We need a new watchdog."
David Cameron echoed Miliband's comments, saying that the body had failed and was lacking in public confidence.
He called for a replacement body to be "truly independent", adding that it would be "much better on a cross-party basis".
The Media Standards Trust said this afternoon that it believed Buscombe's decision was "the right one".
"As we have previously argued, the fundamental problems of the PCC are structural – in terms of its lack of independence from the industry, the opacity of its funding arrangements, and its lack of adequate formal powers.
"But there has clearly been a failure of leadership at a time when the PCC needed firm direction. Not only did the outgoing chair preside over a wholly inadequate investigation into phone-hacking at the News of the World (which the PCC finally withdrew on 6 July 2011), but she criticised the Guardian for its investigation and had to pay damages following a libel action by the lawyer, Mark Lewis."
Earlier this year, the PCC was forced to apologise and pay damages to Lewis, who has represented a number of possible hacking victims in civil cases against News International, after Buscombe accused him of misquoting a police officer in claiming that 6,000 people may have been victims of phone hacking.
The Trust went on to say it supported the continuing work of the PCC as an organisation: "It is important that the good work of the commission’s staff is allowed to continue, and this decision is in no way allowed to hamper their valuable mediation. At the same time, however, Baroness Buscombe’s departure should not deflect the need for, and serious discussion about, the comprehensive reform of the self-regulatory system."
Buscombe, who was made a life peer in 1998, was announced as the PCC's new chair in 2008, and succeeded Sir Christopher Meyer in March 2009.
She joined the body from the Advertising Association, where she was chief executive. She has also been Conservative front bench spokesman in the House of Lords and was trained as barrister.
Her decision to step down from the PCC comes in the wake of further damning allegations of phone hacking at the News of the World.
The Met police's Operation Weeting team has contacted Sara Payne, whose daughter Sarah was killed by convicted paedophile Roy Whiting in 2000, to inform her that she may have been targeted by private investigator Glenn Mulcaire while he was working for the tabloid.
The murder of Sarah Payne was the catalyst for the News of the World's campaign for "Sarah's Law", which brought about a change in sex offenders legislation.
Sara Payne worked closely with the newspaper on the campaign, which was spearheaded by former editor Rebekah Brooks. Brooks provided Payne with a mobile phone for the purposes of the campaign, which News International has paid for for the past 11 years.
Payne remained a staunch supporter of the tabloid throughout the phone hacking crisis, penning a piece for the final edition in which she said that staff there "became my very good and trusted friends".
Some of those staff, including former managing editor Stuart Kramer, attended the funerals of Payne's parents.