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The chief executive of the Student Loans Company, who attracted controversy over his tax arrangements, is to stand down.

The publicly-funded body says Ed Lester will leave his £182,000 post when his contract expires early next year.

Until February, Mr Lester received his pay package without deductions for tax or National Insurance.

An outcry over the arrangements led to a review of public sector pay.

The review identified more than 2,400 cases of public sector staff being employed indirectly rather than having tax deducted at source through PAYE.

Since January, 350 such contracts have been ended and tighter rules have now been introduced.

Mr Lester's salary arrangements had been agreed by the tax authorities and the government. He was paid gross through his private service company based at his home address.

A spokeswoman for the Student Loans Company (SLC) said: "Ed Lester has always made it clear that he would be leaving the Student Loans Company when his contract expired in January 2013.

"He accepted the position as permanent Chief Executive and Accounting Officer on a two year contract on 1 February 2011."

Mr Lester would not be commenting, the SLC said, and his replacement would be paid through PAYE, as Mr Lester had been since February.

The arrangement for Mr Lester's pay was disclosed in an HM Revenue and Customs letter obtained under the Freedom of Information Act by Exaro News and ´óÏó´«Ã½ Newsnight.

Following the revelations, Treasury Chief Secretary Danny Alexander said the way in which Mr Lester received his salary would be changed and launched a review of similar arrangements across Whitehall.

Each government department has now published a list of "off payroll" appointees earning more than £58,200.

Mr Alexander also announced a consultation on a new law to require any person in control of an organisation, in the public or private sector, to be on its payroll.