Co-Op Crisis: Boss Euan Sutherland 'Quits'

The chief executive of the Co-operative Group has quit amid continuing turmoil at the mutual, Sky sources say.

Euan Sutherland resigned on a point of principle and cited the Group's structure as 'ungovernable', it is understood.

The sources added that efforts were continuing at the highest level of the Group to persuade him to change his mind.

But Mr Sutherland was known to be furious over a number of leaks to the media - leaks that he believed had come from the top of the organisation and included details of his pay - and apparent hesitancy on his plans for Group reform.

An emergency board meeting on Monday night - held to discuss his resignation letter - also proposed a restructuring that will result in the current 21-member board being disbanded and replaced by two different structures.

One will be a PLC-type board while the other will represent members.

The appointment of now ex-bank chair Paul Flowers is being investigated

The decisions were taken following a crisis for the Co-op which has seen its banking operation subjected to regulatory scrutiny after control was lost to US hedge funds.

A £1.5bn black hole in the bank's balance sheet sparked the Co-op's problems but the restructuring of the lender left the Group with just a 30% stake.

Mr Sutherland's own role was in focus at the weekend over plans to raise his own pay to £3.6m despite the mutual's problems and an expected worst-ever loss for 2013 of £2bn, due to be announced at the end of the month.

The debate over rising awards at the Co-op began just weeks after Mr Sutherland admitted the Group had "lost touch" with customers.

The Co-op could sell 15 farms and its pharmacy business

At that time he launched an online poll so the public could make suggestions about its future direction.

A plan to sell parts of its business also left question marks over more than six thousand jobs.

Mr Sutherland has only been in the job since last April.

He expressed fury about media leaks on Sunday in a Facebook posting to an employees' group after the news on pay awards appeared in a national newspaper.

He said: "I'm very sorry to have to report that we have had yet another leak to the media.

"This time it is to the Observer newspaper and concerns levels of annual Executive remuneration, including my salary, and also proposed changes to the Group Executive team.

"It appears that, once again, the leak has come from our Group Boardroom.

"We seem to have an individual, or individuals, determined to undermine me personally, my team and the rest of the Group Board regardless of the uncertainty and disruption this causes to our 90,000 colleagues and our supportive members.

"Despite this, I am determined that we will see through the vital transformation of our business."

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.

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