Lastminute.com UK marketing director Vijay Solanki said the firm had started a review and "will be making an announcement about how we manage PR in due course".
Biss Lancaster managing director of brands Jonathan Sanchez said the agency had resigned the account "as part of our review into how we run our consumer business".
It will continue to work on Lastminute's late travel deals for the next eight weeks.
Sanchez joined Biss Lancaster as director of brands from Freud Communications in March. He is briefed with generating more high-profile and proactive consumer work.
While the Lastminute account that Biss Lancaster took on in 2002 had involved positioning the firm as more than "a bucket-and-spade travel shop", it is understood that lastminute's investment in PR has decreased in recent months. This made Biss Lancaster's role less proactive and more press-office focused.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.