The former British Airways marketing chief said he was fed up of "banging my head against a brick wall over the Government's failure to stop the Department of Transport, Local Government and Regions bypassing COI Communications and making its own ad arrangements.
Dear warned that the "go it alone move had given the green light to other departments to follow suit, leading to the weakening and possible break-up of COI along with its central media buying clout.
Dear's departure comes after four years as the chairman of the committee, which advises the Government on the most cost-effective use of its £195 million media spend.
It also completes a double whammy for the Cabinet Office, which was rocked last week by the resignation of the COI chief executive, Carol Fisher.
News of Dear's decision to quit came as it emerged that his committee had called for a probe by the National Audit Office into the DTLR's review.
It ended with the £20 million account being split between six agencies, all of which would have been available through the COI roster.
"The committee is there to protect taxpayers and I am not convinced that what has happened is in taxpayers' best interests, Dear said.
He admitted he had run out of patience with ministers and senior civil servants over what he claimed was their failure to act on the committee's warnings. "I've decided I'd rather sit in a deckchair and read."
Although sources in Whitehall professed surprise at the news of Dear's resignation, they claimed he should not have been surprised by the DTLR's move given that COI does not enjoy a monopoly and that departments are allowed to "shop around".
They also dismissed suggestions that COI, which came through a recent five-yearly review with a clean bill of health, was facing break-up.
Meanwhile, COI is to get a new political boss. He is the high-flying minister Douglas Alexander, one of Gordon Brown's closest allies, whose first task as a Cabinet Office Minister will be to decide how to recruit Fisher's successor.
Although some insiders want the Government to replace Fisher with a civil servant, Alexander is expected to open up the post to people from the private sector. "Fisher's style meant she had her critics but she has used her private sector experience to turn COI around, one source said.