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Chamberlain declined Gladstone's offer of the office of First Lord of the Admiralty.
Gladstone rejected Chamberlain's request for the Colonial Office and eventually appointed him President of the Local Government Board.
A dispute over the amount to be paid to Collings, Chamberlain's Parliamentary Secretary, worsened relations between Gladstone and Chamberlain, although the latter still hoped that he could alter or block Gladstone's Home Rule proposal in Cabinet, so that his programme of Radicalism could be given more attention.
Chamberlain's renewed scheme for National Councils was not discussed in Cabinet, and only on 13 March were Gladstone's proposals for Ireland revealed.
Chamberlain argued that the details of the accompanying Land Purchase Bill should be made known in order for a fair judgment to be made on Home Rule.
When Gladstone stated his intention to give Ireland a separate Parliament with full powers to deal with Irish affairs, Chamberlain resolved to resign, writing to inform Gladstone of his decision two days later.
In the meantime, Chamberlain consulted with Arthur Balfour, Salisbury's nephew, over the possibility of concerted action with the Conservatives, and contemplated similar cooperation with the Whigs.
His resignation was made public on 27 March 1886.

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