Eric Daniels will be removed tomorrow from the shortlist of candidates being considered to become the next chairman of Aviva, the insurance group, following an outcry from investors.
Shareholders reacted quickly to the news last week that Mr Daniels (above), who stepped down from Lloyds last month, was one of the favourites to succeed Lord Sharman. Some of Aviva's biggest investors immediately contacted the company, saying they would not accept him as the new chairman.
One source said: "We simply cannot understand how Colin Sharman or the headhunters could have let Mr Daniels get anywhere near the list after his reign at Lloyds. He was responsible for as much value destruction at Lloyds as Sir Fred Goodwin was at RBS."
Not all investors were concerned at the prospect of Mr Daniels as chairman, however, despite his role in the bank's disastrous acquisition of the bad-debt laden HBOS.
Aviva has been looking for a new director to join the board with a view to taking over as chairman since last year, and wanted a candidate to serve on the board before taking the top job. Lord Sharman is due to step down in 2013. Other names in the frame include former Labour ministers Lord Davies of Abersoch and Lord Myners.
The shortlist is understood to have been narrowed down to three candidates.