Music exec Ben Cook has stepped down from his role as president of Atlantic Records over a Run DMC outfit he wore at a party seven years ago.
Cook, who gave Ed Sheeran his first record deal, said in a statement that it was with "great sadness" that he made the announcement.
He said: "Seven years ago, at a birthday party where guests were asked to come dressed as their favourite musical icon, I came as a member of Run DMC.
"Late last year rumours began to circulate about my appearance at that event, many of which are simply untrue."
Run DMC were a hip-hop group comprised of Joseph "Run" Simmons, Darryl "D.M.C." McDaniels and Jason "Jam Master Jay" Mizell who found fame in the 1980s with a string of hits including It's Like That and It's Tricky.
Cook added that while he intended to "honour a musical hero" he had made a "terrible mistake" with his "offensive" appearance.
"As a consequence of this, I readily agreed to disciplinary actions by my employer last year. Since then however, allegations surrounding the party have continued to be made against me. I have therefore come to the conclusion that I should make this statement and step down, with immediate effect."
A statement from Atlantic's parent company, Warner Music, said: "Ben Cook is leaving Atlantic UK and this will be his last week in the office".
They also confirmed his position would be filled by Parlophone boss Mark Mitchell on an interim basis.
Cook had held his role since 2014 after a six-year stint as president at Atlantic's imprint Asylum Records UK, where he helped develop Sheeran's career.
He had originally joined Atlantic Records in 2007 as managing director of Asylum.
Meanwhile, Sheeran announced earlier in the year that he would be taking time off from his music career to spend time with wife Cherry Seaborn.