OTTAWA - Judy Sgro, who was already on political life support, succumbed today to a fresh allegation of wrongdoing and resigned as federal immigration minister. But she said she was only stepping down to allow her to prove she's innocent and fight to clear her name. She became the first casualty in Prime Minister Paul Martin's seven-month-old minority government, which limped back to power in June on promises of being squeaky clean after the sponsorship scandal. Sgro's departure came after allegations made by a Toronto pizzeria owner, reported in today's Toronto Star, that she promised him asylum in return for providing food and workers for her re-election campaign last June. Harjit Singh, who is fighting deportation to India, claims in a sworn Federal Court affidavit that when word of their arrangement leaked out, she ordered his deportation to "save her job."Sgro dismissed the matter as "outrageous fabrications" and part of "a smear campaign."

She said doesn't even know Singh and has never spoken with him.

"It's a totally false allegation which is why I'm so furious that I've taken the unusual step of stepping aside from cabinet and insisting to the prime minister that I had to be free to defend myself," Sgro told CBC-TV.

Sgro suggested desperation might be the motive for Singh's allegation.

"He's been avoiding deportation in this country for years, he's at a point now where he's going to be deported, he's desperate and he's going to do anything and say anything that will keep him in the country."

Sgro had already been battling for her job amid allegations she gave priority immigration treatment to a Romanian stripper who had also worked on her campaign in her Toronto riding.

Those allegations are under investigation by the federal ethics commissioner.

Martin had rebuffed persistent Opposition calls for Sgro's resignation by asking for time for the stripper allegations to be investigated.

He changed his mind after the latest allegations, accepting Sgro's resignation "with regret," and suggesting he was keeping the cabinet door open for her.

"I continue to support Judy Sgro," Martin said today. "I think that she was a very strong minister and I think that she brought a great contribution to citizenship and immigration and I look forward to her continuing public career."

He said he had not asked her to quit and that it was Sgro's initiative to step aside.

Conservative Leader Stephen Harper slammed Martin's handling of the matter.

"This was obvious to everybody months ago that this minister had to go and I'm surprised that the prime minister couldn't provide leadership and it finally took her own resignation to get the change," he said in Regina.

"I think the pattern is that this prime minister doesn't act, he dithers and the dithering in this case allowed problems to build in the immigration department."

Martin said Sgro's resignation would not put a stop to the ethics commissioner's probe and Harper said he was eager for the work to be completed.

"The allegation here is that Immigration Department business was being done in a election office for election purposes . . . and I think we have to get to the bottom," Harper said.

Sgro was replaced by fellow Toronto-area MP Joe Volpe, who moved into the portfolio from the Human Resources Department.

Intergovernmental Affairs Minister Lucienne Robillard takes on Volpe's responsibilities at Human Resources, in addition to carrying her existing portfolio.

Sgro, a former Toronto city councillor, was first elected to the Commons in a 1999 byelection and re-elected in 2000 and 2004.

She worked her way up from the backbenches, serving as a committee member, a parliamentary secretary and chair of a caucus committee on urban issues where she used her background in municipal politics to good effect.

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