EUAN SUTHERLAND has resigned as chief executive of the Co-operative Group, describing the mutual group as "ungovernable".
Richard Pennycook, the Co-op's chief financial officer, will step into the role on an interim basis.
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The Times reports that the Co-op's board was reluctant to accept the resignation.
"In a failed effort to salvage the situation and persuade Mr Sutherland to stay, the board agreed to call a vote of the Co-op's entire membership on plans for a radical overhaul," the paper reports.
According to commentators quoted by the BBC, Sutherland's departure stems from a clash of cultures between the mutual traditions of the Co-op, which is owned by its customers, and the more cut-throat approach of its modern business rivals.
"Mr Sutherland's resignation offer may have come about due to disagreements at board level on the direction the Co-operative Group should be taking," John Thanassoulis, professor of financial economics at Warwick Business School, told the BBC.
"This is a comment on how viable the Co-operative Group's business model is – can it survive or does it not work?"
Sutherland was criticised after details of a proposed remuneration package of £3.66m were leaked over the weekend.
"Liberal Democrat and Labour politicians denounced the pay as not being in line with the Co-ops's ethical principles," the Times reported.
The resignation comes after a year of financial problems in Co-op's banking division and the arrest of the division's former chairman Paul Flowers for alleged drug offences.
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