Beleaguered Eisner finally commits to a leaving date from Disney

Michael Eisner, the veteran chief executive of Disney who has been the subject of a mounting campaign of vilification by rebel shareholders, will leave the company when his contract ends in September 2006.

Michael Eisner, the veteran chief executive of Disney who has been the subject of a mounting campaign of vilification by rebel shareholders, will leave the company when his contract ends in September 2006.

The move brings to an end a fractious period in Disney's history. Mr Eisner was forced to give up his dual role as chairman and chief executive earlier this year, after the US cable giant Comcast made a $60bn (£33bn) hostile takeover bid.

Mr Eisner's decision to resign, after a two-decade reign at one of the world's best known companies, may be an attempt to head off a further move by shareholders to force him to stand down altogether before his contract expires in two years' time.

Reflecting the pressure he has been under from critics within and outside the company, Mr Eisner, 62, laid out what he planned to do on retiring in his letter to Disney's board, saying: "I'm going to Disneyland!"

Disney's share price has slumped in recent months amid a string of controversies which culminated in the resignation from Disney's board of Stanley Gold and Roy Disney, the nephew of the group's founder. Mr Disney complained that the company's share price had underperformed, leaving it open to hostile takeover bids, such as that from Comcast.

The two men were highly critical of Mr Eisner's stewardship, and masterminded the campaign to force him to relinquish his role as chairman at the group's annual meeting earlier this year. In a move which was highly unusual in America, where shareholders normally support all directors' decisions, 45 per cent of shareholders also voted against the board's recommendation that he should be re-elected.

Allowing a two-year period in which Disney can appoint a new chief executive should give the company time for a smooth succession. Analysts said yesterday that whoever the company, known as the "magic kingdom", selects will be critical, because it has shown signs of being on the brink of a financial turnaround.

Potential successors include Bob Iger, Disney's chief operating officer, and rival media executives such as Jeff Bewkes, the head of Time Warner's entertainment arm, Mel Karmazin, the former chief operating office at Viacom, and Peter Chernin, the chief operating officer of News Corp.

Mr Eisner was reported as saying his decision to stand down was not influenced by Comcast's bid, which was rejected by the board as too low, and then withdrawn.

Mr Eisner said he was grateful for the continuing support of Disney's remaining board members, at what had been a "very challenging time". He added that he and his top team had followed the advice of the baseball player Babe Ruth:"When asked how he keeps his cool when the fans go crazy, hollering and hooting every time he comes to bat, he explained: 'I keep my eye on the ball.' Our executive team has not been diverted from the task of creating intellectual product, efficiently running the company, and preparing for the future," Mr Eisner said.

The timing of Mr Eisner's departure will also give him some breathing space to restore his own reputation. Once unassailable, there has been speculation that Disney might not have granted him a new contract even if he had wanted one in 2006.