BERLIN (Reuters) - German Defense Minister Karl-Theodor zu Guttenberg resigned on Tuesday after admitting to copying part of a doctoral dissertation, stunning Angela Merkel and depriving her conservatives of their brightest star.

Guttenberg, 39, was the most popular member of Chancellor Merkel's cabinet. His loss deals a severe blow to her Christian Democrats (CDU), who were crushed in a vote in Hamburg last month and must fight three more state elections this month.

Merkel, who had gone out on a limb to support Guttenberg in the face of plagiarism accusations, admitted she was taken by surprise when Guttenberg called her on Tuesday to quit.

"I deeply regret his resignation," said Merkel, praising his political talent. "I accepted it with a heavy heart. Like many other people in our country, I'm very saddened by this."

Guttenberg, who had been accused of copying parts of the dissertation without correct attribution, was stripped of his doctorate last week.

"I was always ready to fight but I've reached the limit of my powers," Guttenberg told journalists in a hastily arranged briefing at the Defense Ministry.

"I informed the chancellor in a very friendly conversation that I'm resigning from political offices and requested to be relieved. It's the most painful step of my life," added Guttenberg, who had often been mentioned as a future chancellor.

"I'm not only leaving because of my error-filled doctorate, although I can understand this would be reason enough for many in the academic community. The reason is because of the question whether I can still live up to the highest expectations I put on myself."

At first Guttenberg rejected the charges as "fanciful." Later, after scores more copied passages were discovered, he said he had made mistakes and acknowledged that his dissertation was flawed, although he has not admitted to plagiarism.