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Gov. James E. McGreevey (search), a one-time rising Democratic star and twice-married Roman Catholic, announced his resignation with the startling disclosure that he is gay and had an extramarital affair with a man that he said threatened to undermine his "ability to govern."

"My truth is that I am a gay American," McGreevey said Thursday at a news conference with his second wife by his side. He described decades of sexual confusion that dogged him through two marriages and ultimately led him to an act he called "wrong, foolish and inexcusable."

"Given the circumstances surrounding the affair and its likely impact upon my family and my ability to govern, I have decided the right course of action is to resign," he said, without elaborating on what the circumstances were.

McGreevey, 47, refused to answer questions. He said "it makes little difference that as governor I am gay," but added that staying in office and keeping the affair and his sexual orientation secret will leave the governor's office "vulnerable to rumors, false allegations and threats of disclosure."

McGreevey said his resignation would be effective Nov. 15.

Two sources close to McGreevey, both speaking on condition of anonymity, said the man involved in the affair was Golan Cipel (search), an Israeli poet who met the governor during a trip to Israel.

One source, a senior McGreevey political adviser, said Cipel threatened McGreevey several weeks ago that unless he was paid "millions of dollars," Cipel would file a lawsuit against the governor charging him with sexual harassment.

Cipel could not immediately be reached for comment Thursday. An FBI spokesman did not confirm reports that McGreevey's office called the bureau on Thursday to complain about Cipel asking for money.

Across New Jersey, people listened to their radios or gathered around TV sets to listen to McGreevey's live news conference. Many were left in shock, although rumors had been circulating for several years that McGreevey was gay.

"It's a shame," said Jim Nerney, 48, of Middletown. "He brought a lot of passion to the governor's office, but the fact is that it's not accepted in today's society and he's paying the consequences."

"His sexual orientation doesn't matter to me. I feel he's done a good job, holding the line on taxes," said Donald Bowman, 52, of Kearny, a school district worker in Newark.

Senate President Richard J. Codey, a Democrat, will become acting governor and serve out the remainder of McGreevey's term, which ends in early 2006. If McGreevey were to leave office before Nov. 15, a special election would be held.

Former Republican Gov. Christie Whitman (search) said McGreevey "made a courageous decision" but criticized his plan to wait until Nov. 15 to leave office, saying it "smacks of politics." She said it "would be in the best interests of the state" for the governor to step aside immediately.

Gay rights groups expressed support and compassion for McGreevey, but their reactions were tinged with sorrow because McGreevey announced his resignation just as he became the nation's first openly gay governor.

"It is a very sad to thing to watch. It is kind of stunning, sad to me that in 2004 people are still having to struggle because of homophobia in society to come to terms with who they are," said Kevin Cathcart, executive director of Lambda Legal.

McGreevey had a daughter with his first wife, Kari, who lives in British Columbia with the child. He has another daughter with his current wife, Dina. McGreevey spokesman Micah Rasmussen declined to answer any questions about the future of McGreevey's marriage.

McGreevey rose from mayor of suburban Woodbridge to state chief executive by his tenacious pursuit of party politics, winning the Statehouse in November 2001 by beating Republican Bret Schundler by 15 percentage points.

Despite inheriting a $5 billion budget deficit, he steadfastly refused to boost income taxes for most New Jerseyans. He instead raised taxes on millionaires, casinos and cigarettes and provided millions of dollars worth of property tax rebates that have been showing up in residents' mailboxes in recent weeks.

A former altar boy, he proudly discussed his Catholic faith but publicly disagreed with church leaders over his support for abortion rights and same-sex partnerships. He pushed for the state's domestic-partnership law, which went into effect this year.

Scandal marred McGreevey's tenure following questions over a series of questionable appointments, including the naming of Cipel to the newly created post of homeland security adviser without any background check or official announcement.

Reporters soon questioned what Cipel did to earn his $110,000 salary and in March 2002, he was reassigned to a "special counsel" job. A few months later, Cipel left his state government position.

McGreevey also came under fire in 2002 for hiring a state police superintendent who had a criminal record. Last year, two former aides were targeted in a federal probe investigating whether they used their political ties to secure business for their billboard company.

This year, a Democratic fund-raiser and former high school classmate of McGreevey's was indicted and charged with trying to extort campaign donations from a farmer in exchange for help in selling his land.

Last month, the governor's commerce secretary quit amid reports he funneled money to businesses he owned with family members, and McGreevey's top campaign donor was charged with conspiracy, obstructing a federal investigation and promoting prostitution.

McGreevey's administration did have its victories, exemplified most recently by legislation signed this week to protect the water supply in the Highlands section of northern and western New Jersey.

"Today's announcement should not detract from Gov. McGreevey's accomplishments on behalf of the people of New Jersey — from protecting our environment and promoting stem cell research, to fighting sprawl and easing the tax burden for millions of hardworking people," said Sen. Jon Corzine, D-N.J., who has been mentioned as a possible gubernatorial candidate.