A statement from the RAC board last night said that Jeffrey Rose had also been asked to step down as director after he wrote to members "without the agreement or authorisation of the board".
In the letter, taking his cue from the conversion of major building societies to banks, Mr Rose had proposed to members of the RAC's Pall Mall club to sell their stake in the organisation in return for either stock market shares or cash.
He told the 12,000 full members that "professional advisers will, of course, continue to be employed at every stage and it's their preliminary view that a sum of pounds 20,000 could be realised for each full member."
For a pounds 620 signing-on fee and another pounds 600 a year, full members can swim in the central London RAC club or play golf at Woodcote Park country club, near Epsom, Surrey. Under Mr Rose's plan they would also have seen a 1,900 per cent increase in their investment.
It is not clear how the six million associate RAC members, who pay between pounds 29 and pounds 150 for the breakdown service, would have benefited. The RAC is rich - with annual sales of pounds 300m it makes a pre-tax profit of pounds 60m a year. Recently the club acquired the BSM empire of driving instructors for pounds 54m.
Mr Rose, 67, had been expected to retire in May. In its statement, board members said they were of the unanimous view that his letter "makes his position as chairman untenable".
They said: "The issues raised in Mr Rose's letter, including demutualisation ... are important, complex and regularly reviewed by the board. The board and the management are united in their commitment to promoting the best interests of all members, full and associate." A report last year by bankers HSBC Markets said both the RAC and the AA were "collectively owned by their members" and any move to the stock market could result in windfalls for staff and customers.Reuse content