"I take responsibility for my part in this election campaign, which was the oversight of our policy programme. In particular, I regret the decision not to include in the manifesto a ceiling as well as a floor in our proposal to help meet the increasing cost of social care.
"But I would like to make clear that the bizarre media reports about my own role in the policy’s inclusion are wrong: it had been the subject of many months of work within Whitehall, and it was not my personal pet project.
"I chose not to rebut these reports as they were published, as to have done so would have been a distraction for the campaign.
"But I take responsibility for the content of the whole manifesto, which I continue to believe is an honest and strong programme for government."
The PM has been blamed for not standing up to her advisers enough Credit: i-Images Picture Agency The pair were a key part of Theresa May's team Credit: PA:Press Association He went on to say that the Conservative campaign "failed to notice the surge in Labour support" - taking aim at those like Sir Lyton Crosby who were running the election messages.
"The Conservative election campaign, however, failed to get [that Britain is a divided country] and Theresa's positive plan for the future across" he said.
Mr Timothy said this was partly "because modern campaigning techniques require ever-narrower targeting of specific voters, and we were not talking to the people who decided to vote for Labour."
With Brexit talks set to begin in just 10 days time, he also stressed the need to support the PM - and not appear weak in front of Brussels chiefs.
"I hope the Conservative Party in Parliament gets behind the Prime Minister, and allows her the political space to negotiate that deal," he said.
Fiona Hill said in a statement: "It’s been a pleasure to serve in government, and a pleasure to work with such an excellent Prime Minister. I have no doubt at all that Theresa May will continue to serve and work hard as Prime Minister – and do it brilliantly."
Tory MP Anna Soubry said the news was "excellent" and "the best thing he's done in a long time".
And Nigel Evans said he hoped a more "inclusive" style of government would now begin. "Nick Timothy was one of the architects of this social care policy that derailed us," he added.
But Labour's Tom Watson said Theresa May was "the one responsible for her own defeat".
This morning a former aide to Theresa May lifted the lid on the "toxic" atmosphere inside No 10 - where her top advisers Nick and Fiona were "rude, abusive and childish".
Advertisement she said: "The chiefs of staff were great street fighters but poor political leaders.
"Great leaders lead by bringing people with them, not alienating them before having even digested breakfast.
"What I could never work out was whether Mrs May condoned their behaviour and turned a blind eye or didn’t understand how destructive they both were. For all the love of a hierarchy, the chiefs treated Cabinet members exactly the same — rude, abusive, childish behaviour."
Who are Nick Timothy and Fiona Hill?
Nick Timothy: BORN in Birmingham, the steelworker’s son, 37, first worked for Theresa May as a Home Office special adviser.
Nick was appointed her joint chief of staff last July.
He is said to have had a key role in the Tory manifesto and was blamed for the catastrophic “dementia tax”.
He lists his hobbies as Aston Villa and Graham Greene.Fiona Hill: SHARP-tongued Fiona Hill switched to politics from journalism, having worked for The Scotsman and Sky News.
The divorcée, 44, from Greenock, Renfrewshire, was a fierce May loyalist when a Home Office special adviser.
Sidelined after a spat with Michael Gove in 2014, she returned in July as Mrs May’s communications chief.
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