Vaughan steps down as captain
The decision was announced during a hastily arranged press conference at Loughborough even though yesterday evening Vaughan said he "would let the dust" settle on the defeat.
Paul Collingwood has also stood down as one-day captain, meaning that England will announce a new captain for both forms of the game on Monday. The frontrunner is Kevin Pietersen, who is a fixture in both teams. Collingwood is currently serving a four-match suspension for a slow over-rate.
An emotional Vaughan said he felt the time was right to go and will take some time out of the game and won't play in the final Test at The Oval, though he remains available for selection for future England contests.
"It's the hardest decision I've ever had to make, but also the easiest," said Vaughan. "I put my heart and soul into the job but if I kept on going my career could have come to an abrupt end. I think this decision will prolong my career.
"I thought it might be time to go in New Zealand, where my body was working well but my mind was not working well. I will always cherish the support I've had, but this is a weight off my shoulders.
"I had every ambition to lead the England team to the next Ashes Series but as England captain I feel I've run out of steam," he added. "I believe that the best thing for the team is to embark on a new direction under a new captain.
"I also believe the best thing for me is to try and get back to being best batsmen I can be. I'll still have all the experience and knowledge to pass on and I hope to be a valuable player for both my county and the England team.
"I'd like to take this opportunity to thank all the fans who have always been so supportive and have provided a huge inspiration to me as captain. A captain is only as good as his teams and I've been fortunate enough to captain some terrific players and great blokes."
It brings an end to Vaughan's 51-match run as captain, four games short of becoming England's long-serving leader, although his 26 victories makes him, statistically, the most successful captain.
"He's led from the front and always led with integrity and honesty. He's been the best possible ambassador for the England cricket team," said managing director Hugh Morris.
However, the pressure on Vaughan has been growing in recent months despite back-to-back series victories against New Zealand. The series loss to South Africa is England's third in five series, dating back to the 1-0 reversal against India last summer. They then lost by the same margin in Sri Lanka before losing the first Test against New Zealand in Hamilton. Vaughan led a shake-up of the team by dropping Matthew Hoggard and Steve Harmison and England hit back to take the series, but the performances were not convincing.
Adding to the stress on Vaughan has been his own lack of runs. He has made 40 in five innings against South Africa, consistently being troubled by the pace bowlers, and his last ten Test have produced just one century and an average of 22.
He took on the role against South Africa in 2003, following Nasser Hussain's resignation which also came after an Edgbaston Test. His first Test in charge, at Lord's, was a thumping innings defeat, but he subsequently secured victories at Trent Bridge and The Oval as England shared the series.
The defeats in the past two weeks at Headingley and Edgbaston were the first time he has lost back-to-back Tests and a hallmark of his reign as captain was how England could bounce back from defeats. His finest moment was the 2005 Ashes victory, although he was also at the helm for historic away successes against West Indies in 2004 and South Africa in 2005.