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James Comey has been fired as director of the FBI over his handling of the Hillary Clinton email investigation, the White House announced on Tuesday.

The move came as CNN reported that a grand jury had begun issuing subpoenas to associates of Michael Flynn, the former national security adviser at the centre of the ongoing probe of Russian meddling in last year’s presidential election. If confirmed, the report suggests that the FBI’s investigation into the Trump camp’s links with Moscow has entered a significant new phase.

Comey’s sacking, which was condemned by one Senate Democrat as “Nixonian”, raised concerns over the independence of the investigation and prompted vociferous demands for a special prosecutor to be appointed.

In a letter to Comey, the president wrote: “While I greatly appreciate you informing me, on three separate occasions, that I am not under investigation, I nevertheless concur with the judgment of the Department of Justice that you are not able to effectively lead the bureau.“It is essential that we find new leadership for the FBI that restores public trust and confidence in its vital law enforcement mission.”

The dismissal of America’s top law enforcement official came days after he testified on Capitol Hill about Clinton’s use of a private email server as secretary of state and the FBI’s investigation into Russian election interference.

Comey incorrectly testified that former Clinton aide Huma Abedin “forwarded hundreds and thousands” of emails to her husband’s laptop, including some with classified information. On Tuesday, the FBI informed the Senate judiciary committee that only “a small number” of the thousands of emails found on the laptop had been forwarded there, while most had simply been backed up from electronic devices.

In a recent interview, Clinton partly blamed Comey’s letter in late October notifying Congress that the FBI was studying the emails on the laptop, for costing her the presidential election.Comey had also been fiercely criticised for holding a press conference last July in which he said Clinton would not be charged but criticised her as “extremely careless”. The move was seen as infringing on the role of the justice department and attorney general.

The timing of Comey’s dismissal was related to the recent confirmation of Rod Rosenstein as deputy attorney general, according to the White House. In a memo released on Tuesday, Rosenstein wrote: “The director was wrong to usurp the attorney general’s authority on 5 July 2016, and announce his conclusion that the [Clinton] case should be closed without prosecution.”

The memo added: “Compounding the error, the director ignored another longstanding principle: we do not hold press conferences to release derogatory information about the subject of a declined criminal investigation … the director laid out his version of the facts for the news media as if it were a closing argument, but without a trial.

“It is a textbook example of what federal prosecutors and agents are taught not to do.”

A statement from the White House said: “Today, President Donald J Trump informed FBI director James Comey that he has been terminated and removed from office. President Trump acted based on the clear recommendations of both Deputy Attorney General Rod Rosenstein and Attorney General Jeff Sessions.”

The search for the next head of “our crown jewel of law enforcement” will begin immediately, the statement said. Comey’s deputy, Andrew McCabe, takes over in the interim.