'Guardian' CEO resigns from Tesco board

Carolyn McCall, boss of the publishing business that owns The Guardian, yesterday resigned as a non-executive director of Tesco, the supermarket group that is embroiled in a libel case with the newspaper.

Ms McCall, who last year earned £62,000 sitting on the board of Tesco, told the company that she no longer felt able to serve as a director because of the conflict of interest she faces as the legal dispute continues.

Ms McCall is chief executive of the Guardian Media Group, owner of The Guardian, which earlier this year ran a front-page story alleging that Tesco had avoided paying up to £1bn of taxes in the UK by setting up a series of offshore companies through which the proceeds of several property deals were channelled.

The supermarket group denied the story before and after publication, and subsequently filed a High Court writ against The Guardian and its editor, Alan Rusbridger. It is understood Ms McCall felt comfortable staying at Tesco while it was simply disputing The Guardian's story, but was compelled to stand down once libel proceedings were issued. She told David Reid, Tesco's chairman, that she intended to resign her position within days of The Guardian receiving the writ last Friday, but held off making a formal announcement until yesterday while she spoke with fellow board directors.

Ms McCall said: "It is with regret that I have decided to resign from the Tesco board, but given the clear conflict of interest it would be inappropriate for me to continue in the role."

Tesco has previously said Ms McCall absented herself from all board discussions about The Guardian's story and the company's decision to take legal action. It has also said it put no pressure on her to step down.

Mr Reid said yesterday he was accepting Ms McCall's resignation "with regret". He said: "She has been a very good non-executive director and has made a strong contribution to the success of the business." Ms McCall will receive no severance package from Tesco.