Media have reported that Mercer, who is MP for Newark, said he will not be standing at the next election to 'save my party embarrassment'.
His resignation comes after The Daily Telegraph revealed it had been working with the BBC’s Panorama to investigate what it called 'a major lobbying scandal' in relation to MPs and members of the House of Lords.
The Telegraph has said it will publish ‘a series of revelations’ about the former shadow minister's activities tomorrow.
The paper said that these allegations relate to Mercer 'lobbying on behalf of Fiji'.
Covering the resignation, the Telegraph pointed to parliamentary records in which Mercer asked a question about the regime’s suspension from the Commonwealth and put down an Early Day Motion.
In a statement, Mercer said: ‘Panorama are planning to broadcast a programme alleging that I have broken parliamentary rules. I am taking legal advice about these allegations - and I have referred myself to the parliamentary commissioner for standards.
'In the meantime, to save my party embarrassment, I have resigned the Conservative whip and have so informed Sir George Young. I have also decided not to stand at the next general election.’
Earlier this month PRWeek revealed that public affairs agencies had seemingly been the target of a newspaper sting in relation to All Party Parliamentary Groups.
The news follows the CIPR recently calling Deputy Prime Minister Nick Clegg’s reassurances that he was pushing for a statutory register of lobbyists 'not enough'.