TORONTO (AP) - Prime Minister Stephen Harper's chief of staff stepped down on Sunday over an expenses scandal that also forced the resignation of a conservative senator.

Mr Nigel Wright announced his resignation in statement following revelations that he gave a C$90,000 (S$110,169) gift to a senator to help repay improper housing expenses. The senator, Mike Duffy, resigned last week.

Mr Wright, the wealthy former managing director of a private equity investment firm, said he helped Mr Duffy repay his expenses because he felt it was in the public interest to do so. He said he accepts sole responsibility for his actions and said he did not tell Mr Harper about the gift before or after he gave it to Mr Duffy in March.

Critics say the payment violated ethics rules that prohibit senators from accepting gifts.

Mr Harper, who stood by his chief of staff when the gift was revealed last week, said he accepted Mr Wright's resignation with regret.

"I accept that Nigel believed he was acting in the public interest, but I understand the decision he has taken to resign," the prime minister said. "I want to thank Nigel for his tremendous contribution to our government over the past two and a half years."

Mr Harper appointed longtime adviser Ray Novak to replace Mr Wright.

The prime minister is expected to address his troubled caucus on Tuesday. Some members of Mr Harper's Conservative Party have been pushing for greater autonomy from the prime minister's office.

Conservative Party lawmaker Brent Rathgeber said Mr Wright's gift showed the trouble with the lack of separation between the executive and legislative branches of government.

"When there's inadequate separation between those two institutions, it appears to me that both are compromised," Mr Rathgeber told Global TV's West Block with Tom Clark.

"As a legislator I don't want to be beholden or indebted to individuals from the executive at any level," he said.