Former Post Office boss Paula Vennells is to hand back her CBE following the fallout of the Horizon IT scandal which led to the wrongful prosecution of hundreds of subpostmasters.
The former chief executive's pledge to return the honour comes as Fujitsu has been ordered to answer questions from MPs on an influential select committee next week over its role in the scandal.
Meanwhile the judiciary did not raise "any significant challenges" over plans to quash Horizon convictions during a meeting with Justice Secretary Alex Chalk, Downing Street said on Tuesday.
Ms Vennells, who ran the Post Office while it routinely denied there was a problem with its Horizon IT system, was appointed a CBE in December 2018.
The move to give back the gong came after demands for her to return it intensified after an ITV drama, Mr Bates versus the Post Office, thrust the widespread miscarriage of justice into the spotlight.
A petition with more than one million signatures was collected demanding Ms Vennells be stripped of her honour.
Paymaster general John Glen said on Tuesday: "It is right that Paula Vennells has handed back her CBE, maintaining the integrity of the honours system."
The Prime Minister’s official spokesman added: "We think that is obviously the right decision.
"Our focus continues to be on ensuring all those whose lives were torn apart have swifter access to compensation and justice."
Announcing her decision, Ms Vennells said in a statement: "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 subpostmasters and others to return my CBE.
"I have listened and I confirm that I return 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 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."
As political pressure grows over the scandal Fujitsu executives have been asked to appear before MPs at a parliamentary committee hearing next week.
The Japanese technology business manufactured the faulty Horizon computer system at the heart of the scandal, which led to the wrongful conviction of hundreds of subpostmasters.
The Business and Trade Committee said the Government’s Post Office minister Kevin Hollinrake has confirmed he will attend the evidence session on Tuesday January 16.
Alan Bates, the former subpostmaster who brought a claim against the Post Office and was the subject of a recent ITV drama, has also been invited to attend the committee.
The prime minister's spokesman said: "Once the inquiry is able to establish the facts and sets them out, those who are found responsible will be held to account, whether that is legally or financially."
Former subpostmistress Jo Hamilton said she is "glad" Ms Vennells is handing back her CBE but stressed: "It’s a shame it took just a millionpeople to cripple her conscience."
Ms Hamilton, who was wrongfully convicted in 2008 of stealing thousands of pounds from the village shop in South Warnborough, Hampshire, added: “It shows the people have spoken – about everything really.
“It’s not just about her CBE, it’s about how disgusting the whole thing is.
“We’re all sick and tired of people taking money, being paid exorbitant amounts of money, and politicians taking absolutely no notice of you whatsoever… I think the people are just sick of it.”
There is not believed to be a formal process for Ms Vennells to hand back her CBE, which was bestowed on her in 2019 for services to the Post Office and charity.
Whitehall’s forfeiture committee can strip the ex-Post Office chief of her gong.
Downing Street declined on Tuesday to say whether the committee was probing whether to take such action, stressing it was an independent committee.
It can decide to start an inquiry if it gets a demand to do so, and the request and case meets certain criteria.
Labour MP Kevan Jones, who is one of the MPs who helped to expose the Horizon scandal, has written four times to the committee urging it to strip Ms Vennells of her CBE.
A petition calling for Ms Vennells to be stripped of her CBE had been signed by more than 1.2 million people as of late Tuesday morning.
Robin Priestley, Campaigns Director at 38 Degrees which hosted the petition, said: "This is an incredible example of people power in action.
"Petition signers, inspired by the amazing work of Alan Bates, the Justice for Subpostmasters Alliance, and ITV’s fantastic dramatisation, not only added their names but they also emailed their MPs, shouted about the campaign on social media and made sure they were listened to."
Petition starter David Smith, 35, a former software developer from Greater Manchester, said: "To me, the removal of the CBE is just the start. The ultimate goal is for the subpostmasters to get the justice they deserve.
— Paul Scully MP (@scullyp) January 9, 2024
"In many ways, this is symbolic, but it is a massive symbol.
"What I'm hoping is that as soon as somebody as senior as her is held accountable at this level, it will start a domino effect that will lead to the justice and compensation that everyone affected deserves."
Prime Minister Rishi Sunak on Monday backed the forfeiture committee looking into Ms Vennells’ case.
Previously, postal services minister Kevin Hollinrake has suggested she should hand back the CBE.In 2009, trade publication Computer Weekly reported the claims of flaws with Horizon, alongside the postmaster prosecutions.
Amid mounting pressure from the media and lawmakers, the Post Office began to investigate the issue, but in 2015, Ms Vennells told a parliamentary committee that there had been no evidence of any miscarriage of justice.
In late 2019, the Post Office agreed to settle claims made by 555 sub-postmasters. However, many of the victims found the amount paid in compensation was outweighed by legal fees.
The government says roughly £138 million have so far been paid out to over 2,700 claimants across three separate Post Office compensation schemes.
Still, many postmasters are yet to receive compensation or have their convictions quashed.
No senior Post Office staff have been punished to date.
Ms Vennells, who received more than £4.5 million in salary and bonuses during her seven-year tenure, stepped down in 2019 before the Post Office agreed to pay £58 million in a settlement with 555 sub-postmasters.
In 2021 she resigned from the boards of two retailers after 39 sub-postmasters had their criminal convictions overturned, saying her past at the Post Office had become a distraction.
