Tulip Siddiq has resigned as a Treasury minister after accepting the government was being harmed by the furore over her close ties to her aunt, the ousted prime minister of Bangladesh now accused of corruption.

Siddiq, who was the City and anti-corruption minister, stepped aside after an investigation by Laurie Magnus, the adviser on ministerial standards, into her use of properties given to herself and family by allies of the regime of Sheikh Hasina.

She was not deemed by Magnus to have broken any rules over her use of the homes and he found no evidence to suggest that any of Siddiq’s assets were derived from anything other than legitimate means.

The inquiry also looked into her presence at the signing of a 2013 nuclear deal between her aunt and Vladimir Putin in Moscow. The adviser accepted her explanation that she had been there only socially and as a tourist.

However, Magnus also said a lack of records and lapse of time has meant that he had “not been able to obtain comprehensive comfort in relation to all the UK property-related matters referred to in the media”.

The watchdog added that Siddiq could have been more alive to the reputational risks arising from her family’s ties to Bangladesh and suggested the prime minister would want to consider her responsibilities.