Sir Alan Sugar will add the job of chief executive to his role as chairman

Sales halved to �65m in the 12 months to 30 June from �128m and operating profits were �4.4m, down from �13.1m.

An Amstrad spokesman told BBC News Online he could not give further details about why Mr Watkins was leaving or what he would go on to do.

Before his role as chief executive, Mr Watkins served on the board of Amstrad as director of manufacturing and is credited by the company for playing a key role in the revolution of the personal computer market in the UK.

Amstrad said last week that sales were lower than the previous financial year when digital satellite decoder deliveries were boosted by BSkyB's decision to give the boxes away free.

The company is pinning its future on its latest product, the e-m@iler, which allows people to use email and other communications without using a personal computer.

The company has demonstrated its confidence in the loss-making e-m@iler phone by raising its stake in the joint venture.