Alan Yentob has resigned as the BBC's creative director in the wake of controversy over his role as chairman of the Kids Company charity.

Camila Batmanghelidjh’s Kids Company closed in August amid a row about funding and controversy over a £3m government grant brining its management into question.

Mr Yentob, who has faced scrutiny for his role in the charity’s financial mismanagement, has stepped down from his BBC role saying that the ongoing speculation was "proving a serious distraction" when the BBC was in "particularly challenging times".

He has also been accused of trying to influence BBC journalists when Ms Batmanghelidjh was interviewed on Radio 4 in the wake of the scandal – something he denies. He said: “I just thought I was there to listen to what Camila said and this is an organisation that I'm familiar with. If it was intimidating, I regret it."

Announcing his resignation he said: "The BBC is going through particularly challenging times and I have come to believe that the speculation about Kids Company and the media coverage revolving around my role is proving a serious distraction.

"So I have spoken to Tony Hall and told him that I think it best that I step down from my senior management role as creative director at the end of this year and focus on programme-making and TV production - including of course the Imagine series.

"I love the BBC and will continue to do everything I can to ensure that it thrives and fulfils the great expectations we all have of it."

Mr Yentob, who was born to an Iraqi Jewish family in London and has created shows on the BBC about being Jewish, such as The Last Jews of Iraq on Radio 4 about the death of the community his parents were born into and Broadway Musicals: A Jewish Legacy, will leave his £183,000-a-year role later this month.