Mr Powell, 45, the man responsible for Eldorado, had another year of his contract, worth about pounds 90,000 a year, to run. He joined the BBC 15 years ago.
He had an uncomfortable relationship with the incoming Director-General, John Birt, who is intent on making major managerial changes. Last year Mr Birt blocked his plan to launch another soap - a twice-weekly version of Casualty.
Under Mr Powell, BBC 1 has been at the centre of the corporation's bitter internal debate about the 'Himalayan peaks' - how far its programme mix should be upgraded.
A shy, quietly spoken man, not known for high-profile lunches with stars, he has had to carry the can for a recent decline in ratings brought about by an aggressive ITV drive with popular drama series, and the BBC's own lack of investment in new programmes, especially drama. He has had to weather criticism over screening old-fashioned light entertainment such as The Generation Game, Caught in the Act and Bobby Davro Public Enemy Number 1. He is also a defender of Neighbours, which the public enjoys but the BBC will probably discard when the contract expires in 1995.
Mr Powell said yesterday: 'It has been the most difficult time to do this job. I haven't talked John Birt down from the Himalayan peaks. The BBC internal debate did start off at a fairly high level, but you can't have broadcasting without popular programmes. It doesn't exist.
'Of course John Birt is entitled to take a close interest in programmes. He is editor-in-chief. It's very good he sets very high standards. We've not had an enormous amount of contact. But it is very difficult to inherit the traditions of a channel when the whole organisation is under debate.
'In the end it always comes down to popular programmes, and what they should be. Sometimes the people discussing them are not the people who enjoy watching them.'
He said the key question was whether the BBC's licence fee income would be large enough to meet its quality programming ambitions: it is freezing new programme contracts while trying to claw back a pounds 58m overspend.
Mr Powell, who took over as controller from Michael Grade in 1988, is identified with last July's launch of Eldorado, the pounds 10m soap opera which has failed to come alight. Insiders say it is unlikely to survive beyond next July. Mr Powell said: 'Eldorado will survive if the audience takes to it. I am not leaving the BBC because of it.'
His colleagues expressed regret at his departure. 'There is a lot of affection for him. It is sad to see him go, even if he has not been brilliant at the job,' one said. Mr Powell is married to Sally Brampton, a fashion writer and ex-editor of Elle magazine.
Contenders for the post include Janet Street-Porter, head of BBC youth programmes, who is highly rated by Mr Birt; Tony Hall, director of BBC news and current affairs; Andrea Wonfor, controller of arts and entertainment at Channel 4; David Elstein, director of programmes at Thames Television; and the insiders' hot tip Steve Morrison, managing director of Granada Television.
However, there could be a dramatic swap with Carlton Television's programme director, the fast-talking Paul Jackson.
Mr Birt worked with him when he was director of programmes at London Weekend Television and Mr Jackson was producing Saturday Night Live, the Channel 4 comedy series.
Mr Powell, a graduate of the University of East Anglia, was responsible for a range of golden BBC drama series in 1977-87. They include Testament of Youth, Tinker Tailor Soldier Spy, Pride and Prejudice, The Bell, Smiley's People, Bleak House, Tender is the Night and A Perfect Spy.
He is proud of launching EastEnders and Casualty. 'I am not an art house person. I do quite genuinely believe in popular, quality programmes, reaching the largest possible audience.'Reuse content