Sir Iain Vallance, once seen as one of the business sector's prime modernisers, fell out of favour with investors as BT's troubles grew.

In shareholder's minds he is linked with the strategy that saw BT accrue �30bn worth of debt, and so in recent months pressure had grown for him to leave the company.

The company's share price jumped as news broke that he had resigned, to be replaced by the BBC's Sir Christopher Bland.

Sir Iain had been expected to step down in July next year.

His early departure could be seen as an unfortunate end to a career which has delivered much, if promised more.

It was Sir Iain, after all, who is credited with persuading the then Conservative government to privatise BT.

Privatisation pioneer

His career in the sector began in 1966 when, after an education in London, Scotland and Oxford, he joined the Post Office, of which his father had been Scottish director.

Helped by an masters degree from London Business School, he rose to join the inaugural BT board when the telecoms business was formed as a separate unit in 1981.

His reward for securing the privatisation of BT three years later, a move which set a trend for state-owned telecoms firms around the world, was to be appointed chief executive by 1986, and take on chairmanship as well a year later.

He held the two roles through a troubled period for BT, as the company struggled to overcome the unrest associated with its transformation into a private company.

Huge workload

Under Sir Iain's stewardship, BT implemented a massive programme of job cuts (the firm's workforce nearly halved in its first 14 years as a plc).

Little wonder that in 1995 he announced he was to hand over the role of chief executive, and with it a huge workload, to Peter Bonfield.

"The combination of the two roles has real merit in the period of unprecedented change following BT's privatisation," Sir Iain said.

"But the board has agreed, on my advice, that a return to a more conventional separation of the roles is now appropriate."

Resignation rumours

Officially, Sir Iain ceded even more control when his chairmanship became part-time in 1998.

Many observers, however, feel he has reduced his obligations as chairman only to allow him to retain an executive role.

Which is one reason why Sir Iain has been the target of so much of the criticism aimed at BT - to the extent that the firm took the highly unusual step in October of issuing a press release denying that he was about to quit.

Whatever BT's successes under Sir Iain's leadership, the firm cannot be said to have achieved the global position he has so often promised and which, through deals such as the proposed MCI merger, at one time looked attainable.

Other analysts believe that, judged from today's standpoint, Sir Iain retains too much of the public sector ethos to oversee the next round of transformation BT so sorely needs

tive director with the shortest CV.

Click here to read a profile of BT's chief executive, Sir Peter Bonfield.