Birmingham MP Sion Simon has announced he is stepping down from Parliament and will launch a bid to become the city’s first elected mayor.

Mr Simon will leave his job as a Culture Minister in Gordon Brown’s government next week, and will stand down as an MP in his safe Labour constituency of Birmingham Erdington when the General Election comes.

He is in the process of repaying £21,000 he received from House of Commons expenses to rent a London flat from his sister.

Mr Simon said last year that Commons authorities had cleared the arrangement but in April 2006 a new rule prohibited MPs from renting from family members.

He plans to become a city councillor - giving him a platform to campaign for the post of elected mayor.

Conservatives have pledged that Britain’s big cities, including Birmingham, will be ordered to hold referenda on created mayors if they win the election. Tories believe a powerful elected leader similar to London mayor Boris Johnson would help major cities compete with rivals across the globe and take more control of local services.

Labour also backs mayors, but has not promised to hold a referendum.

Mr Simon insisted: “I am convinced that elected Mayors should and will be introduced for our major cities in the next Parliament, whoever is in government.”

He said he remained loyal to Gordon Brown, calling him “a towering figure” who could win the next election.

His decision to quit Parliament will spark a furious battle to become Labour’s new candidate in Erdington, where the party won a majority of 9,575 in the 2005 election.

The 41-year-old MP, the Minister for creative industries, has represented Erdington since 2001. He has also served as a skills minister, and was one of the ringleaders of the 2006 plot by backbench Labour MPs which succeeded in forcing Tony Blair to announce a date for resigning as Prime Minister.

To become Birmingham’s mayor, he will first need to convince local party activists to make him the Labour candidate.

But he said he was gambling his career on winning the post because he believed the way the city was run needed radical reform.

Mr Simon said: “It has become clear to me that the answers to Birmingham’s problems do not lie in Westminster and Whitehall. We need to take back control of our own city.

“We need strong, dynamic leadership with streamlined decision-making powers. The current 19th century arrangements give us neither. The City Council, as an institution, is not fit for purpose in the 21st century.”

He added: “I will put myself forward for consideration as the Labour candidate. As a result, I will not be seeking re-election as MP for Birmingham Erdington this year. I hope that Birmingham people will see this as my badge of commitment to the city.

“I already have pledges of support from city MPs, senior local government, business and community leaders who share my thirst for change.”