BT chief executive Ian Livingston has quit to become Britain's new trade minister, it was announced today.
Shares in BT fell up to 4 per cent after David Cameron announced that 48-year-old Mr Livingston will replace Lord Green as the Minister of State for Trade and Investment.
Mr Livingston, who spent five years as BT chief executive, is to be succeeded by Gavin Patterson, boss of the company's retail business.
"This was not in my plans or my timing but it is something really important and a difficult thing to say no to," he said. "If someone said to me six weeks ago I'd be doing this, or even four weeks ago, I'd have been extremely surprised."
BT chairman Sir Mike Rake said: "Ian has done a tremendous job in transforming BT. His decision to accept a Government post demonstrates the sense of public service which many of us know to be characteristic."
The Prime Minister called Mr Livingston an "outstanding business leader", adding: "I know that he will make an invaluable contribution to this agenda as the Government continues to open new trade links and grow our exports".
Mr Livingston will step down from BT in September and take over the unpaid role in December from HSBC veteran Green, who had always planned to serve a two-year term. The Scot will take up his seat in the Lords as a Conservative life peer. "It is not just about the big corporates, I want to help more SMEs to get exporting. We are still a great trading nation and the more we trade, the better," he said.
He was marked out as a high-flier by retail tycoon Stanley, now Lord, Kalms, who made him finance director of electricals chain Dixons at the age of 32. He joined BT in the same role 11 years ago, helping to slash a £28 billion debt pile, cut costs and tackle increased competition when regulators forced its network open for rivals.
"I think I can talk pretty cogently about why Britain is a great place to do business," he said. "In many years as a retailer, one does acquire habitual selling capabilities."
Mr Patterson has overseen BT's recent move to take on BSkyB by winning the rights to show Premier League games live and offering its sports channels free to its broadband customers.
* TV watchdog Ofcom today announced an investigation into BSkyB after a complaint by BT over the terms on which its rival offers its sports channels. BT says the supply of Sky Sports 1 and Sky Sports 2 to the YouView platform is conditional on BT making its own sports channels available to Sky for retail on Sky's platform. BSkyB said: "Sky considers BT's latest complaint to be entirely without merit."