Ken Dwan, co-owner of Lambeth Pier-based Tidal Cruises, has resigned as Queen's Bargemaster over his connection with the Marchioness pleasure boat which sank near Southwark Bridge.
Dwan was asked to resign from the ceremonial role by Buckingham Palace following protests from relatives and survivors of the Marchioness tragedy.
Mr Dwan co-owns Tidal Cruises – based at Lambeth Pier, opposite Lambeth Palace – which owned the Marchioness. The boat sank in 1989 killing 51 people when it hit the Bowbelle dredger on the Thames near Southwark Bridge.
A spokeswoman for Buckingham Palace said: "He was asked to resign by Buckingham Palace and has done so.
"He has resigned in light of his involvement with the Marchioness."
Reacting to news of the appointment, Margaret Lockwood-Croft – whose son Shaun died in the Marchioness disaster – told the Evening Standard: "I find it totally unjust, inappropriate and unacceptable. What next, is he going to be knighted by the Queen?"
Mrs Lockwood-Croft, a member of the Marchioness Action Group, added: "Dwan was severely criticised during the public inquiry into the Marchioness disaster for his company's lack of proper safety procedures, yet here we have the Lord Chamberlain's Office giving him a prestigious position on the river."
Southwark Cathedral houses a memorial to the victims of the disaster.