British Home Secretary Suella Braverman has resigned after sending an official document from her personal email in a "technical infringement" of government rules.
Former transport secretary Grant Shapps, a major backer of Rishi Sunak for the Tory leadership and a critic of Ms Truss, will now replace Ms Braverman, a statement from Downing Street confirmed.
In her resignation letter, which was posted on Twitter, Ms Braverman said she "made a mistake, I accept responsibility".
Ms Braverman added that she had "serious concerns" about the government's commitment to honouring commitments it made to voters at the last election.
"It is obvious to everyone that we are going through a tumultuous time," she said.
"Pretending we haven't made mistakes, carrying on as if everyone can't see we have made them and hoping that things will magically come right is not serious politics.
"I have made a mistake; I accept responsibility; I resign."
Ms Truss, in a letter sent to Ms Braverman, said that it is important that cabinet confidentiality is respected.
"I accept your resignation and respect the decision you have made," Ms Truss wrote.
Ms Braverman became the shortest-serving UK home secretary in modern political history, lasting 43 full days in the role from 6 September to 19 October.
Meanwhile, Conservative Chief Wendy Morton and Deputy Chief Whip Craig Whittaker remain in post, despite reports that they too had resigned.
Fracking vote
In the House of Commons, the government defeated Labour's bid to ban fracking amid farcical scenes in the House of Commons.
Conservative whips initially stated the vote on whether to allocate Commons time to consider legislation to stop shale gas extraction was being treated as a "confidence motion" in Ms Truss's embattled government.
Labour's motion was defeated by 230 votes to 326, majority 96.
Allegations of bullying were also levelled against Government whips, with Labour former minister Chris Bryant saying some MPs had been "physically manhandled into another lobby and being bullied".
Conservative MP Charles Walker has described the chaos in the House of Commons as "inexcusable" and an "absolute disgrace".
"To be perfectly honest, this whole affair is inexcusable. It is a pitiful reflection on the Conservative Parliamentary Party at every level and it reflects really badly obviously on the Government of the day," he said.
Asked if there is any coming back from this, Mr Walker, visibly angry, said: "I don't think so. And I have to say I've been of that view really since two weeks ago."
'I am sorry'
Earlier today, Ms Truss made a public apology in the House of Commons as she faced questions for the first time since her economic plan was ditched by Chancellor Jeremy Hunt.
Ms Truss told MPs: "I have been very clear that I am sorry and that I have made mistakes."
On Monday, Mr Hunt reversed almost all of the tax cuts announced by his predecessor, Kwasi Kwarteng, in September as he sought to calm financial markets following weeks of turbulence.
"The right thing to do in those circumstances is to make changes, which I have made, and to get on with the job and deliver for the British people," Ms Truss said.
Shouts of "Resign" could be heard as she spoke.
The prime minister is battling to retain her position and has risked a fresh fight with Tory MPs by making a vote on a Labour motion on fracking a test of confidence in her administration.
Asked why her chancellor lost his job over the UK's mini-budget but she kept hers, British Prime Minister Liz Truss admitted she had made mistakes but said 'the right thing to do ... is to make changes, which I have made, and to get on with the job' | https://t.co/xl1J3ysfqC pic.twitter.com/3sewmFMJTe
— RTÉ News (@rtenews) October 19, 2022
Ms Truss insisted she is "a fighter not a quitter" after Labour leader Keir Starmer said the Conservatives' economic credibility is "gone" and said of Ms Truss, "why is she still here?"
Mr Starmer, in his concluding remarks, said: "The only mandate she's ever had is from members opposite, it was a mandate built on fantasy economics and it ended in disaster.
"The country's got nothing to show for it except the destruction of the economy and the implosion of the Tory Party."
He read out a list of dropped economic policies, with Labour MPs shouting "gone" after each one.
He added: "Economic credibility - gone. And her supposed best friend the former chancellor, he's gone as well. They're all gone. So why is she still here?"
Ms Truss replied: "I am a fighter and not a quitter. I have acted in the national interest to make sure that we have economic stability."
UK Labour leader Keir Starmer says a book is being written about Liz Truss' time in office as UK PM. "Apparently it's going to be 'Out by Christmas' - is that the release date or the title?" Ms Truss says she has done more in months than he has in years | https://t.co/xl1J3yJQia pic.twitter.com/xQkdVGfqIm
— RTÉ News (@rtenews) October 19, 2022
No confidence letter
Meanwhile, Conservative MP William Wragg said he had submitted a letter of no confidence in Ms Truss after being "ashamed" of the mini-budget.
Read more:
Analysis - Chances of PM Liz Truss surviving the week improve
Mr Wragg said that although he opposes fracking, he had planned to vote vote with the government so that he would not be removed from the parliamentary party.
Removal would invalidate a letter of no confidence Mr Wragg said he had already submitted to the chairman of the 1922 Committee, which sets the rules for selecting and changing a leader.
"I wish to maintain that letter," he told parliament.
Former Brexit minister David Frost has also joined calls for Ms Truss to resign.
"As Suella Braverman made so clear this afternoon, the Government is implementing neither the programme Liz Truss originally advocated nor the 2019 manifesto. It is going in a completely different direction," he wrote in the Telegraph.
"There is no shred of a mandate for this. It's only happening because the Truss Government messed things up more badly than anyone could have imagined, and enabled a hostile takeover by its opponents."
Earlier, foreign minister James Cleverly warned restless Tory colleagues against "defenestrating" another prime minister as he suggested a leadership contest would neither win the hearts of the British public nor calm the markets.
Mr Cleverly, a prominent supporter of Ms Truss throughout her campaign for the top job, insisted "the plan is not to make mistakes" but "they do happen", after the prime minister's authority was hammered by a raft of humiliating U-turns to quell the mini-budget turmoil.
He said he understands why people are "frustrated" with the Tory leader, adding that dire polls for the party are obviously "disconcerting" for the government.
But he said he is "far from convinced" of the benefits of another leadership campaign, cautioning against an "emotional response" from those "angry" about the current predicament.
It comes amid more gloomy news for the economy, with inflation returning the 40-year high it hit earlier this summer.
The prime minister faces disquiet from Tory MPs over plans for public spending cuts across all departments, after Mr Hunt warned of decisions of "eye-watering difficulty" to plug the government's multi- billion-pound financial black hole.
'After ten U-turns in two weeks we're left with a Prime Minister in office but not in power', SNP MP Ian Blackford says, urging Liz Truss to make a pensions U-turn. 'I honestly don't know what the honourable gentleman is talking about', Ms Truss replies | https://t.co/xl1J3ysfqC pic.twitter.com/kH1mSBKE4v
— RTÉ News (@rtenews) October 19, 2022
Ms Truss said she and the Chancellor remain "completely committed" to the triple lock on pensions.
In answer to a question about the pension rise guarantee from SNP Westminster leader Ian Blackford, she said: "I honestly don't know what he is talking about because we have been clear in our manifesto that we will maintain the triple lock and I am completely committed to it. So is the Chancellor."
Mr Blackford had earlier accused her of being "in office but not in power" and called on her to "commit to raising the state pension at the rate of inflation".
Ms Truss also said she was committed to the Northern Ireland protocol bill which would in effect override parts of the Brexit deal with the European Union unless a negotiated agreement with the bloc is found.
"I am completely committed to the Northern Ireland protocol bill," she said. "Any negotiations will reflect the same position that is in the protocol bill."
Former Cabinet minister Michael Gove has said it is a matter of time before Ms Truss is ousted and warned British people to expect "a hell of a lot of pain in the next two months".
Additional reporting: Reuters
