First, I would like to thank you for this excellent question!
Let me answer you...
First things first, team members should never, ever communicate directly with stakeholders. What your team member is doing is trying to overcome your responsibility and forcing you to commit to something that he will not be accountable for.
Here's what you should do in order to address the situation:
- Talk to your sponsor: Let the sponsor know of the situation, and tell him that the team member replied to the stakeholders without even consulting with you and that he's trying to do your job. Tell him that this will affect the project control process as the stakeholders will receive information from multiple sources.
- Ask your sponsor to communicate to your stakeholders to deal with you: Your sponsor must tell your stakeholders (who are now probably under the impression that your engineer is the PM and you're the engineer) to communicate with you when they have something to say about the project. Your sponsor should also tell your stakeholders not to communicate with the engineer directly.
At this point, here's what your project sponsor might do:
1- He might agree with you and address the problem: Which is exactly what you want.
2- He might tell you to address this problem yourself: In this case you will need to sit down with your engineer and ask him to communicate to you, and the stakeholders. Your engineer will naturally resist the thought as you are limiting his access to top executives that will most likely help him in his career. If this happens (and it will most likely will), then you will need to send a very polite and formal email to your stakeholders informing them that you're the single point of contact about the project as you are the project manager, and that any discussions about the project that you are not an active part of can cause some conflicts in the flow of the project. Your stakeholders should understand. You should also make sure you limit the access of the your engineer to your stakeholders.
3 - He might tell you that he sees no problem if the engineer acts as a PM: This can happen! (It happened to me at one point). However, keep in mind that your engineer is not a project manager, and will soon fall into the trap of doing multiple things at the same time, and trying to meet the increasing expectations of the stakeholders. This will go very bad for him!
In any case, you shouldn't be passive about this as this little act that your engineer did might threaten your career as a PM. You need to be very proactive.
In conclusion, no, you should never let a team member do your job. You can delegate some tasks to your team member, but you should never let him do your job as a PM.