Arnold Levine has resigned as president of Rockefeller University in New York amid reports of a public and allegedly inappropriate encounter with a female graduate student.

In a statement issued on 10 February, 62-year-old Levine said he was leaving to address matters affecting his health. “In light of my health issues, I regret I will not be able to continue to lead this extraordinary institution and these talented people,” he wrote.

But sources at the university confirmed reports that Levine has resigned over what one of them described as an “inappropriate incident” with a female graduate student that occurred on 10 January. Various reports of the encounter have swept through Rockefeller in recent weeks.

According to the sources, the encounter occurred in the university's faculty club, a popular meeting place for researchers and graduate students. Both Levine and the participating student were intoxicated, the sources say, and she is said to have told university officials that the encounter was consensual. A male student who was in the faculty club confronted Levine during the encounter, one of the sources says, at which point Levine became angry. This student reported the incident to the Board of Trustees.

Levine, who was the first to isolate the p53 tumour-suppressor protein, rushed back on 8 February from a meeting held to mark the opening of the Spanish National Cancer Centre in Madrid. Summoned by the Board of Trustees, he expressed profound regrets and said he would resign, says a source familiar with the situation. Levine was unavailable to comment on the incident.

Thomas Sakmar, who works on mechanisms of cell signalling and has headed the university's Academic Senate for the past year, has since been appointed acting president while the board sets about selecting a permanent replacement for Levine.

In a statement, Richard Fisher, chairman of Rockefeller's Board of Trustees, called Levine an “admired and inspirational leader” and said Levine had “helped strengthen the university and position it for continued pre-eminence as it enters its second century”.

The resignation has shocked and saddened many inside and outside Rockefeller's campus on Manhattan's upper east side.

Harold Varmus, former director of the National Institutes of Health and current president of the Memorial Sloan-Kettering Cancer Center in New York, says that Levine had been instrumental in strengthening the research community in New York. “There will be an empty ache not having Arnie at the helm across the street,” Varmus says.

Levine left Princeton University in 1998 to lead Rockefeller. He is widely credited with reinvigorating the small but prestigious university, which had suffered a blow to its morale with the forced resignation of David Baltimore as president in 1991. Baltimore left amid charges that a co-author had falsified data in a 1986 paper — a charge that was dismissed by a federal appeals panel in 1996. He is now president of the California Institute of Technology in Pasadena.

Baltimore says that Levine was successful at Rockefeller, recruiting good people and raising money effectively. “I think Arnie's been doing a terrific job,” Baltimore says. “Rockefeller is the kind of institute he understands, and he'll be a very hard person to replace.”