Matt McCarten has pulled out of his Movement for Change programme, slammed by Act as being a Labour campaign "sweat shop".
The programme, aimed at energising non-voters was extremely popular, but quickly became oversubscribed.
The Labour Party has taken control of it after foreign students involved complained about accommodation and conditions.
"The scale of the programme is now greater than I can manage, and I am aware of issues that this has caused," McCarten, Labour leader Andrew Little's former chief of staff, said.
"The Labour Party Head Office contacted me about these issues and requested to take the programme over so that it could resolve them. I have agreed to this and am no longer involved in the programme.