In a major setback to the Obama Administration, Republican Senator Judd Gregg withdrew his nomination as Commerce Secretary due to "irresolvable conflicts" over the stimulus package with the US President.

"I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me," the New Hampshire Republican Senator said.

Terming it as a big surprise, the White House said in a statement it was Gregg who "reached out to the President and offered his name for Secretary of Commerce." Gregg, on the other hand, told reporters that it was the other way round.

"We regret that he has had a change of heart," said Robert Gibbs, spokesperson of White House.

"This was simply a bridge too far for me," Gregg told reporters at the Capitol Hill, adding that the differences were too sharp. As such he would have ended up being a blocking man rather than accelerating the President's agenda.

"Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy," Gregg said.

"He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the President's agenda," the White House said.