Moviemaker Brett Ratner has resigned as producer of the 2012 Oscars.
The Rush Hour director's decision comes just days after he upset gay rights activists by using a homosexual slur during a question-and-answer session to promote his new film Tower Heist.
Ratner apologised for using the word "fag" at the Arclight cinema event in Hollywood on Friday, insisting it was "a dumb way of expressing myself".
Watch Ratner's controversial comments below (at the 2:40 mark)
But the online fuss made by his remark prompted film writers and Oscars bloggers to suggest Ratner was the wrong man to oversee the awards.
Academy of Motion Picture Arts and Sciences President Tom Sherak stood by the filmmaker and insisted Ratner would not be asked to step down over the blunder.
Sherak said: "Brett made a very inappropriate remark, a remark that goes against our most important beliefs and the beliefs of the creative community we represent. He very quickly issued an apology because he knew he had made a mistake."
But, upon receiving the moviemaker's resignation on Tuesday afternoon, Sherak released a follow-up statement to the media.
He said: "He did the right thing for the Academy and for himself. Words have meaning, and they have consequences. Brett is a good person, but his comments were unacceptable. We all hope this will be an opportunity to raise awareness about the harm that is caused by reckless and insensitive remarks, regardless of the intent."
Outspoken Ratner was a surprise and controversial hire for the Academy earlier this year when it was announced he would produce the Oscars with Don Mischer.