It is the second time Draper has been engulfed in political scandal, but this time with the election only a year away there will be no resurrection for the long-time political hack and former spin doctor.
The Smeargate scandal broke last month after emails between him and Damian McBride, Gordon Brown's head of strategy and planning, detailing a plan to create a blog, called The Red Rag, to spread scurrilous stories and gossip about leading Tory party politicians.
They had drawn up a list of politicians to smear including shadow chancellor George Osborne and Tory leader David Cameron.
Draper, a former aide to Peter Mandelson, at first called the idea of launching Red Rag, which was seen as response to right wing blog Guido Fawkes, "absolutely totally brilliant".
In a resignation statement emailed to The Guardian, Draper said that his continued presence as editor of LabourList was detracting from the website.
He said he wished he had never received the email and that he had not replied so quickly with his "totally brilliant" response.
Draper said: "I regret ever receiving the infamous email and I regret my stupid, hasty reply. I should have said straight away that the idea was wrong.
"I do ask people to remember that its contents were never published by me or anyone else involved in the Labour Party and they would never have seen the light of day were it not for someone hacking into my emails and placing them into the public domain.
"Because of that, a silly idea ultimately destined for the trash can became a national scandal."
Last month the Labour Party was still seeking to identify the individual behind the registration of theRedRag.co.uk domain name.
A single blog page is still present with a doctored line from the socialist song 'The Red Flag' being the only content: "Though cowards flinch and traitors sneer, we'll keep the red rag flying here..."
Draper's exit from the Labour scene follows that of McBride who quickly resigned after Guido Fawkes broke the scandal.
Following his exit there were swift calls for Draper to leave and posts such as "LabourList is impotent till Draper goes" appeared on the Labour site.
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