"I am very sorry that any remarks of mine have undermined the progress David Cameron has made on the issue of immigration, as on so many other issues. I have been here once before when William Hague was party leader and I have no wish to go there again.
So, with regret and my continuing support for the future, I hereby tender my resignation as parliamentary candidate for Halesowen and Rowley Regis. I thank my friends in the constituency association for their support."
A Conservative spokesman said: "We have accepted Mr Hastilow's resignation and wish him well for the future."
Deputy Editor's note: "Political realities made this resignation understandable but, for me, it's very disappointing. Most of the blame belongs to the media (particularly the BBC and the Observer) for giving Labour's press team the scalp they wanted all too easily. There was nothing racist in what Hastilow said. Fact. Is it completely naive to wonder if the Party could have stood its ground? It would be interesting to hear Osborne or Spelman spell out exactly how they disagreed with his comments. Political correctness triumphed over common sense with Patrick Mercer's article on the army and with the Catholic adoption agencies issue, and it will continue to do so until a senior figure has the courage of their convictions to challenge it. I suspect they will find far more support for such a stance than they realise. In this case - only one side of the argument was heard so I'm afraid all that some voters will remember from this episode will be that the Conservatives had to ditch some candidate for letting his racism show."
4.40pm: Ben Brogan is reporting that Mr Hastilow has now added to his officially released statement: "They wanted me to issue a statement apologising and I don't feel I had anything to apologise for. If I had said sorry I could have stayed on, but I am not sorry. I have definitely not said anything racist." Don't be surprised if Mr Hastilow returns to fight for another party. He knows that he is finished within the Conservative Party. ConservativeHome knows that UKIP, for example, is seeking to recruit 'Thatcherites' removed from the candidates' list or weren't A-listed.
7.45pm: James Forsyth makes the good point that this Hastilow affair has completely obscured the scandalous misuse of parliamentary allowances by Labour MPs, including Cabinet minister Ruth Kelly. Guess which story is dominating at the BBC...