“In June of 2011, I wrote a character reference letter to the Tax Court of Canada on behalf of an individual to whom my constituency staff was providing casework assistance on a Canada Revenue Agency matter," said Duncan.
The letter, which he says originated from his riding office in Vancouver Island North, surfaced after cabinet members were recently asked to review all of their correspondence.
The directive came following revelations that Finance Minister Jim Flaherty had improperly tried to influence the Canadian Radio-television and Telecommunications Commission on behalf of an Ontario-riding radio station's bid to obtain a new licence.
"While the letter was written with honourable intentions, I realize that it was not appropriate for me, as a Minister of the Crown, to write to the Tax Court," Duncan said in his statement.
"I have therefore offered my resignation as Minister of Aboriginal Affairs and Northern Development to the Prime Minister, which he has accepted."
"I take full responsibility for my actions and the consequences they have brought," Duncan said.
Prime Minister Stephen Harper said while Duncan would continue to serve as an MP, Heritage Minister James Moore will become acting minister of aboriginal affairs and northern development until a new minister is named.
Last month, ethics commissioner Mary Dawson said it was "improper" for Flaherty to have written the letter, and directed him to "refrain from writing such letters in future without seeking approval from her office."
Dawson also rebuked two parliamentary secretaries for improper letter-writing.
Ministers have to stay away from court proceedings because cabinet and the judiciary are separate powers under the Constitution. It's inappropriate for them to be seen as interfering with a judicial or quasi-judicial process. It also violates federal conflict of interest rules.
NDP Aboriginal Affairs critic Jean Crowder said that after seeing Harper defend his embattled senators and ministers' conflict of interests, it was "good' to see Duncan take responsibility for his actions.
Duncan, who was at the centre of First Nations' protests during the past few months, was also heavily criticized in 2011 for his handling of a housing crisis in the northern Ontario community of Attawapiskat. He also suffered from poor health and underwent heart bypass surgery in 2010.
"Conservatives have clearly been unable to get the job done on aboriginal issues. At this crucial time in First Nation, Métis and Inuit relations, the prime minister must move quickly to replace Mr. Duncan," said Crowder.
In an interview Friday on CBC News Network's Power & Politics, interim Liberal leader Bob Rae told host Hannah Thibedeau that Duncan is a decent individual. "He's always been very respectful and thoughtful, but it's a huge job."
"I think the government is, on the weekend, going to have to decide to put in a permanent minister quickly," said Rae, adding that "this is a job that requires a person of judgment and I hope the government can find somebody."
Grand Chief Stan Louttit, of the Mushkegowuk territory that includes the First Nations community of Attawapiskat, said that Duncan's resignation did not come as a surprise.
"What has he accomplished in his term as [aboriginal affairs] minister besides confusion, anger and distrust in government," said Louttit in a written statement to CBC News, adding that he hopes the prime minister will involve First Nations leadership in the selection of a new minister.
'An honourable man'
Congress of Aboriginal Peoples National Chief Betty Ann Lavallée said she was saddened to hear of Duncan's resignation.
“Over a number of years, I have gotten to know Mr. Duncan quite well. He is an honourable man who was doing his best to improve the lives of all Aboriginal Peoples throughout Canada. His contributions in moving the aboriginal agenda forward will not be forgotten," said Lavallée.
Duncan's resignation comes at a time when the federal government and the Assembly of First Nations leadership are negotiating over treaty issues and land-claim settlements, issues brought to the fore by the Idle No More movement and a six-week-long hunger strike by Attawapiskat Chief Theresa Spence.
The federal government is also consulting with First Nations on aboriginal education in the hopes of passing new legislation early next year that would include educational standards for aboriginal children.
Last week, three Liberal senators, all of them aboriginal, walked out of a committee meeting as Duncan was defending the need for his government's proposed Bill C-27, the First Nations accountability act, which does not have the unanimous support of the AFN.
All eyes will also be on the federal government to see how the next budget with impact First Nations and the Department of Aboriginal Affairs and Northern Development.