UPDATE: PETER Slipper will step down as Speaker until an allegation of criminal behaviour against him is resolved.Mr Slipper returned to Australia from the US on Sunday amid opposition calls for his head, following allegations he misused cabcharge dockets and claims he sexually harassed a former close aide.
"I emphatically deny these allegations," he said in a statement shortly after he arrived home, acknowledging they were of a criminal and civil nature.
Any allegation of criminal behaviour was "grave" and should be dealt with in a manner that showed appropriate regard to the integrity of Australia's democratic institutions and to precedent.
"As such, I believe it is appropriate for me to stand aside as Speaker while this criminal allegation is resolved," Mr Slipper said.
The MP said he would return to the Speakership once the criminal allegation, involving the misuse of taxpayer-funded Cabcharges, was determined to be incorrect.
The civil matter, brought against the MP by former staffer James Ashby in the Federal Court, would be resolved "in due course".
Mr Slipper's decision to step down before parliament returns on May 8 heads off what could have been a messy political dilemma for the federal government.
The government was under pressure from the opposition and a key independent MP, Andrew Wilkie, to act against Mr Slipper even though it has no power to force a Speaker to resign or step down.
Opposition Leader Tony Abbott had insisted Prime Minister Julia Gillard personally intervene to force Mr Slipper's hand if the MP refused to step down voluntarily.
"This is a question of the prime minister's judgment, her integrity, her sense of the standing of the parliament," he told reporters in Melbourne on Sunday.
The opposition leader sought to link the issue to both the Craig Thomson affair and a decision to stand down a senior military officer during an investigation into the so-called Skype sex scandal last year.
"She cannot afford to wash her hands of this, as she has washed her hands of the Craig Thomson matter," Mr Abbott said, citing the prime minister's continued public show of support for the embattled Labor MP.
Before Mr Slipper announced his decision, Deputy Prime Minister Wayne Swan insisted Mr Slipper had the right to a presumption of innocence while the matters were before the court.
"We should respect those legal proceedings," he said.
The furore around Mr Slipper threatened to engulf the government in the fortnight leading up to the resumption of parliament.
Any parliamentary move against the MP would have overshadowed the government's budget due to be handed down on May 8.
Mr Slipper defected from the coalition late last year to become Speaker in a move engineered by Ms Gillard.
Deputy Speaker Anna Burke will be acting Speaker until parliament formally decides on a replacement.
The Labor MP, if elected Acting Speaker, will not have a deliberative vote in the lower house robbing Labor of one MP.
However, the change is unlikely to threaten Labor's hold on minority government.