Disgraced former Post Office boss Paula Vennells has bowed to pressure to hand back her CBE amid anger over her role in the Horizon IT scandal.
She announced she will forfeit the honor "with immediate effect" after Rishi Sunak intervened and said he would be in favor of her being stripped of it.
Her decision will put pressure on Sir Ed Davey, the Liberal Democrat leader who was then Post Office Secretary, to hand back his knighthood.
More than 700 branch managers have been convicted after a faulty computer program gave the impression that money was missing from their stores.
The accounting software was designed by Fujitsu, the Japanese technology company, which is facing calls to pay out millions in compensation to victims.
It is one of the biggest miscarriages of justice in British history, with Downing Street now considering issuing a blanket acquittal for those found guilty.
In a statement, Ms Vennells broke her long silence on the scandal to meet growing calls for her honor to be restored.
"I am aware of the calls from sub-postmasters and others for my CBE to be returned," she said. "I have listened and confirm that I will refund my CBE with immediate effect.
"I am truly sorry for the devastation caused to the sub-postmasters and their families, whose lives were torn apart as they were wrongly accused and wrongfully prosecuted as a result of the Horizon system."
Ms Vennells added that she had previously felt it would be "inappropriate to comment publicly" before giving evidence at a public inquiry into the scandal.
Her announcement was welcomed by Mr Sunak, with a Downing Street spokesman saying it was "clearly the right decision" to forfeit the honour.
"Our focus remains on ensuring that all those whose lives have been torn apart have faster access to compensation and justice," he added.
Anger over the scandal has focused on Ms Vennells, who joined the Post Office in 2007 and rose to become CEO in 2012.
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She was awarded her CBE for her services to 'diversity and inclusivity' on the January 2019 honors list, a month before she left her position.
A petition calling for her to be stripped had been signed by more than 1.2 million people, with senior MPs backing the demands.
Formally withdraw the honor
King Charles will have to formally revoke the honor, which was presented to the former post office boss by his mother, the late Elizabeth II.
Ms Vennells will then have to return her badge to Buckingham Palace and will no longer be able to refer to having a CBE in the future.
Senior Tories welcomed her decision and suggested it should prompt Sir Ed to consider returning the knighthood awarded to him in 2016.
Conservative deputy leader Brendan Clarke-Smith said: "While it doesn't go nearly far enough in achieving justice for sub-postmasters, returning the CBE is the right decision.
"Maybe this should set a precedent and it's time for other public figures to do the same."
Richard Tice, the leader of Reform UK, added: "Vennells belatedly did the right thing. The nation looks forward to Sir Ed Davey doing the right thing."
The Liberal Democrat leader also faced wrath from sub-postmasters who said he should be held accountable for his failure to take action on the Horizon scandal.
Yvonne Tracey, a former postmistress who is also a councilor in his constituency of Kingston and Surbiton, said: "I find Ed's denials and distractions shameful.
"It's time for Ed to do the right thing and return his knighthood."
Asked whether Sir Ed will return his knighthood, a Liberal Democrat spokesman said: "No, he won't. As Ed has often said, he wishes he had known then what we all know now.
"It is right that Vennells handed back her CBE, she was at the center of a conspiracy of lies against victims, the public and ministers from all parties."
The Liberal Democrat leader has faced intense criticism since it emerged he rejected a request to meet campaigning deputy postmaster Alan Bates in 2010.
Mr Bates, whose fight for justice has turned into an ITV drama, eventually gave up trying to deal with Sir Ed, accusing him of parroting Post Office rules.
'Trying to avoid responsibility'
Sir Ed later met a group of sub-postmasters and says he raised their concerns with the company but was lied to by bosses who told him they were unfounded.
He told The Guardian: "We were reassured time and time again that the Horizon system was working. We were told not that many postmasters were affected. We have just been told so many lies.
"We must absolutely acquit these people completely - their convictions must be quashed. The Post Office has lied to judges and courts."
But senior Conservatives accused him of trying to avoid responsibility and said he should have been tougher in demanding answers from executives.
Sir Edward Leigh, a Tory MP and former Post Office minister, said it was "reprehensible" that the Liberal Democrat leader was "trying to dodge the bullet".
Sir John Redwood, a former Cabinet minister, added: 'He could have listened to those who knew something was wrong. His job was to oversee management or change management."
A Conservative spokesman accused Sir Ed of 'going into hiding' and said he must 'cooperate fully with the public inquiry to help explain why this happened, to ensure it can never happen again'.
Mr Tice said Sir Ed had failed to "ask the right questions that voters would expect from a minister of the Crown" and that he should resign as Liberal Democrat leader.
"Ed Davey applied what I would call the lazy, complacent 'trust the executives' approach, rather than being a diligent, conscientious minister who challenged the establishment and the status quo and did not accept what he was told," said he. told the Telegraph.
Allies have said the Liberal Democrat leader, who served as Post Office minister from May 2010 to February 2012, is being made a scapegoat.
A source close to him stressed: "As Alan Bates said yesterday, Ed was one of many ministers misled and lied to by the Post Office."
