Democratic Unionist special adviser Andrew Crawford, who has been accused of exerting influence in the Renewable Heat Incentive scheme, has issued a statement after resigning from his top role.
Dr Andrew Crawford has denied attempting to keep a botched green energy scheme open.
He was named by a senior civil servant during an explosive hearing at Stormont as the person who exerted pressure to keep the Renewable Heat Incentive scheme running when officials wanted to close it.
It has ended up costing taxpayers a predicted £490 million over the next 20 years and precipitated the collapse of powersharing at Stormont.
Dr Crawford had been most recently a special adviser with the Department of Agriculture.
Mrs Foster said she accepted his resignation with regret, describing him as a "faithful servant" to the party and the people of Northern Ireland.
"Andrew has felt that given what occurred yesterday and indeed today that he was becoming a distraction to the important work of his minister, but indeed he was becoming the story," she said.
"Anyone who knows Andrew Crawford knows he's a very private person and he didn't want to become the story.
"I have accepted his resignation regretfully I have to say."
A statement from Dr Andrew Crawford said: "In light of the allegations made at the Public Accounts Committee yesterday I believe it is appropriate that I step back from my position in government and resign as a Special Advisor. I am conscious I have become the focus of the story.
"I want to see a full and independent inquiry set up immediately so that it will become clear that at all times I acted with complete integrity in all that I did. I will be happy to give a full account of all of my actions during this period to the inquiry and for due process to take its course.
"However, at this crucial time for Northern Ireland it is vital that I do not become a distraction from the real choice which faces the people of Northern Ireland.
"The election on 2nd March will be the most crucial in the recent history of Northern Ireland. At stake is the future direction of Northern Ireland and whether people want a future in which the DUP continues to hold a strong position or one where republicans dictate the political debate with insatiable demands.
"I will continue to offer my full support to the party and intend to campaign for the election of the strongest DUP representation in the next Assembly. I do not intend to make any further public comment on these issues prior to an inquiry."