The Birmingham city council leader has stepped down after failing to resolve the city’s “bin war”, during which rubbish went uncollected for seven weeks this summer.

Labour’s John Clancy, who took on the role in December 2015, blamed “ill-informed” and “frenzied” media speculation for his departure.

He quit ahead of a meeting on Monday night, where he was due to face calls to resign and a possible vote of no confidence. His resignation comes as a direct result of his handling of the strike, which saw rubbish pile up in the streets, providing what one resident called “a buffet for rats”.

Clancy was under pressure after the aborted deal he struck in mid-August with Unite, the union at the centre of the long-running dispute. On Monday, John McDonnell, the shadow chancellor, backed the bin strike and Sajid Javid, the communities secretary, demanded an urgent update from Clancy. .

Also on Monday, Unite called for the interim council chief executive, Stella Manzie, to follow Clancy’s lead after she opposed the union deal.

Last month, Manzie undermined Clancy by warning that the council’s finances could be wiped out if it did not cut pay and hours for refuse collectors to bring them in line with other council workers. The local authority has paid out £1.1bn in equal pay discrimination claims.

Unite’s assistant general secretary, Howard Beckett, said: “Stella Manzie must follow in John Clancy’s footsteps and resign, and the council honour the Acas [Advisory, Conciliation and Arbitration Service] agreement it reached with Unite to settle this dispute.”

Refuse collectors resumed their strike on 1 September, with workers downing tools for three separate hours each day, as well as returning to depots for breaks.

The industrial action began with a dispute over job losses. Unite claims that restructuring plans threaten the jobs of more than 120 staff, while the council says they will modernise the service and save £5m a year.

In a blogpost, Clancy wrote: “It has become clear to me that frenzied media speculation about the Birmingham waste dispute is beginning to harm Birmingham city council and the Birmingham Labour party. I can see no end to such speculation, as ill-informed as much of it is, for as long as I remain leader.

“I have therefore decided to resign both as leader of the Labour group and as the leader of Birmingham city council, with immediate effect.

“I would wish to stress that the actions I took along with my cabinet to negotiate an end to an extremely complex and difficult industrial dispute were done with the best of intentions. None of us are perfect and I made some mistakes, for which I am sorry and take full responsibility.”

• This article was amended on 12 September 2017. An earlier version said Sajid Javid demanded a meeting with John Clancy to discuss the situation. Javid’s letter to the improvement panel asked for an urgent update from them, before he considered what next steps would be appropriate.

