President Barack Obama's choice to lead the Commerce Department, Senator Judd Gregg of New Hampshire, has withdrawn his nomination.  The Republican lawmaker cites differences with the Democratic president over policy issues, including an economic recovery package nearing final approval in Congress.

Senator Judd Gregg's announcement that he was withdrawing as President Barack Obama's nominee to be commerce secretary shocked much of Washington Thursday.

In a written statement, Gregg cited his disagreement with the Obama administration over issues including the economic recovery plan.

He later spoke with reporters at a news conference:

"For me, I just realized as these issues started to come at us and started to crystallize that it really wasn't a good fit, and that I wouldn't be comfortable doing this and that it wouldn't be fair to him [the prersident] to be part of the team and not be able to be 100 percent on the team," said Judd Gregg.

The $789-billion economic recovery plan has been criticized by Republicans for being short on tax cuts and having too much wasteful spending that will do little to create jobs.

The Senate and House of Representatives reached agreement on a compromise measure late Wednesday, and the plan is expected to be approved by both Democratic-led houses Friday.

At the White House, spokesman Robert Gibbs expressed regret at what he called Gregg's change of heart. But in a written statement he said it became necessary for the senator and the Obama administration to part ways once it became clear that the lawmaker was not going to be supporting some of the president's key economic priorities.  

Gregg's announcement comes just weeks after Mr. Obama nominated him to be the third Republican in his cabinet.

Gregg is not the first nominee to withdraw.
New Mexico Governor Bill Richardson, who was Mr. Obama's first choice for the commerce secretary post, withdrew his nomination because he is facing a legal probe.

Two other nominees withdrew over tax payment problems.  They are former Senator Tom Daschle, who was chosen to lead the Department of Health and Human Services and Nancy Killefer who was nominated to be the country's chief performance officer.