The Samajwadi Party government and Governor Naik were not on the same page over Yadav's nomination and the file recommending his name has moved back and forth nearly half a dozen times between Raj Bhawan and the state government.
Chief Justice of Allahabad High Court, D Y Chandrachud, who is in a three-member committee to select Lokayukta, had also expressed reservation on the name of Yadav, citing his proximity to the ruling party.
"I am thankful that my name has been considered for the appointment of Lokayukta, but considering the controversy envolved, I feel it proper to withdraw my name from the fresh exercise of selection of 'name' for appointment ... Therefore my name may not be considered for the post of Lokayukta," justice Yadav said.
The development came a day after the three-member selection committee failed to deliberate on a fresh name last night in the absence of one of the members.
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The committee comprises Chief Minister Yadav, Leader of the Opposition in the Assembly Swami Prasad Maurya and Chief Justice Chandrachud.
The bill proposed that the committee be made a four-member body comprising the CM, Leader of the Opposition, Speaker and a retired judge who would be selected in consultation with the CM and Speaker.
The amendment was passed after the Governor refused to accept the appointment on the grounds that a proper meeting of the selection committee was not held and also the Allahabad HC Chief Justice had expressed reservations in view of Singh's proximity to the ruling Samajwadi Party.
With the Supreme Court deadline to appoint a new Lokayukta already over, the state government is in a hurry to get fill the post.
The present ombudsman Justice N K Mehtrotra has already spent nine years in office.
The tussle with Raj Bhawan has come at a time when the Governor has refused to clear five names for Legislative Council membership in the nominated members category and sought details about them from the state government twice.