London mayor Sadiq Khan has called for commissioners to take over the running of Kensington and Chelsea Council after its leader and deputy leader tendered their resignations in the wake of the Grenfell Tower disaster.
Nicholas Paget-Brown said he had to share responsibility for "perceived failings" by the authority in the aftermath of the tragedy which claimed at least 80 lives.
His deputy, Rock Feilding-Mellen, also intends to stand down from the council, which also lost its chief executive Nicholas Holgate, following a barrage of criticism over the authority's response to the fire.
Mr Khan, who welcomed the resignation, said the Government had "no option" but to appoint "untainted" commissioners who had "a genuine empathy for local people and the situation they face" to take over running the authority.
He said: "The council now needs to find a way to move forward and find a way to restore the confidence in that community.
"That can only be done with new leadership and a new approach that reaches out to residents who quite rightly feel desperately neglected.
"I ... feel the response from the council and subsequent breakdown in trust is so severe that there is now no alternative and the Government needs to step in quickly."
Commissioners were brought in to run Tower Hamlets Council in 2014, following a critical independent report into the council's award of grants and sale of properties under former mayor Lutfur Rahman.
It comes as Jeremy Corbyn said he has written to Prime Minister Theresa May urging her to increase the scope of the public inquiry.
He has asked for a two-part inquiry, the first looking at specific issues around the fire in at the 24-storey building in Kensington, west London, and reporting back soon, with an additional second part "looking at the national issues".
In his resignation statement, Mr Paget-Brown acknowledged the council had been criticised for "failing to answer all the questions that people have" but that the scale of the tragedy "was always going to mean that one borough alone would never have sufficient resources to respond to all the needs of the survivors and those made homeless, on its own".
He said: "As council leader I have to accept my share of responsibility for these perceived failings.
"In particular, my decision to accept legal advice that I should not compromise the public inquiry by having an open discussion in public yesterday, has itself become a political story.
"And it cannot be right that this should have become the focus of attention when so many are dead or still unaccounted for.
"I have therefore decided to step down as leader of the council as soon as a successor is in place.
"They will appoint a new deputy leader and cabinet."
Downing Street said the council should have "respected" a High Court ruling that the press and public should be allowed into the meeting on Thursday, the first cabinet gathering since the disaster.
Communities Secretary Sajid Javid said that it was a personal matter but "given local people had lost confidence in the leader, it is right that he has stepped aside".
Radical Housing Network, of which Grenfell Action Group is a member, also welcomed the resignation, saying it was "inexcusable that he has spent this long clinging to power".
But, it added: "His appalling resignation statement shows a dogged inability to understand the concerns of the community he is meant to represent."
Chairwoman of the Lancaster West Residents Association, Olesea Matcovschi, is also calling for it to be widened, citing concerns after members met inquiry head Sir Martin Moore-Bick and were "presented with a very narrow terms of reference".
In a separate development, Kensington and Chelsea Tenant Management Organisation (KCTMO) announced it had agreed chief executive Robert Black would "step aside" to "concentrate on assisting with the investigation and inquiry".
An interim chief executive will be appointed, it added.
Labour backed Mr Khan's call to send in commissioners to take over the whole of the council, saying oversight of long subcontracting chains and checks and accountability for outsourced services like housing have failed.
Shadow housing secretary John Healey said the move would amount to "specific, immediate, obvious and necessary action".
He told BBC Radio 4's Today programme: "It's right, it's necessary, it is a big step for Government to take, but this council has not been doing the job for the Grenfell Tower residents or the community around north Kensington, especially on housing and family support after the fire.
"But most importantly, and this is the point that others have made, the public and residents' trust can't be restored by simply replacing the leader and deputy leader by other politicians from the same political group at this stage.
"This is where ministers need to step in, they've been off the pace at every stage in this tragedy, too slow to grasp the scale of the problems and too slow to act, and they need to act on this front now."
Yvette Williams, one of the organisers of the Justice 4 Grenfell campaign group, said the community would not accept commissioners imposed on them without consultation.
She said Grenfell survivors and victims' families are "very, very angry" and claimed that one former resident called her yesterday to reveal their rent for the tower block had been deducted from their bank account.
Ms Williams also criticised the Government for not demanding Mr Paget-Brown's resignation.
She told BBC Radio 4's Today programme: "I do support the mayor in terms of a commissioner-led borough, but how are those people going to be selected?
"That's the process we don't know."
Asked whether commissioners should take over, Tory Kensington and Chelsea councillor Catherine Faulks told BBC Radio 4's Today programme: "I don't think that's a decision for me to say, it's a decision for Government."
Ms Faulks said the council will go ahead and elect a new leader next week.
"That's the democratic process, we all have been elected as councillors and early next week, as early as possible, we will have a meeting and that election process will be put in place and someone will emerge as leader and that person will choose their own cabinet," she said.
Mr Khan's calls were echoed by the shadow communities minister, who said powers "should be used" to take control out of the hands of the council.
Andrew Gwynne told BBC Breakfast: "One of the powers for the Secretary of State for Communities and Local Government has is to instigate an investigation into corporate governance, because there is clearly a corporate governance failure at Kensington and Chelsea council.
"He can then also instruct commissioners - now this is a very rarely, and rightly rarely-used power - but can instruct commissioners to go in and take control of the local authority for a temporary period.
"I feel that is certainly a power (which) should be used in this instance."
He added: "Local councillors still remain in place, there is still that democratic accountability, but it means that central government takes the day-to-day control, through appointed commissioners, in running the council
"It is clear if we are to get a grip on what has gone dreadfully wrong in Kensington and Chelsea then central Government needs to get its act together as well."