Magnusson to fall in reshuffle at West Ham

With his bald head, over-sized ties and pained expressions from the directors box Eggert Magnusson became the public face of West Ham United but the Icelander is expected to step down today as the club's chairman to make way for its owner, Bjorgolfur Gudmundsson.

The move is a highly significant one for West Ham and English football and amounts to a serious mark of intent from Gudmundsson, a previously reclusive billionaire businessman who has ambitious plans to challenge the Premier League superpowers.

The Icelanders acquired West Ham, who last night faced Everton for a place in the last four of the League Cup, last autumn for 108m including debt after a protracted takeover saga. Although Gudmundsson, who is known as "BG", owns 95 per cent of the club he was content to take a back seat and maintain a low profile and allow Magnusson, 60, to run it for him.

But now Gudmundsson has decided that, given his ownership and investment, he wants to take full control and could also appoint his right-hand man, Asgier Fridgeirsson, on to the board, probably as vice-chairman. Another of his close aides, Thor Kristjansson, is already both vice-chairman of the holding company, WH Holdings, which owns West Ham and which Gudmundsson already chairs, and executive vice-chairman of the club.

West Ham are engineering an assault on the top-four with a new 60,000-seat stadium, expected to cost around 250m and to be financed privately by Gudmundsson, already in the planning stage, at the Parcelforce site close to the existing Boleyn Ground which will be sold. The new stadium will be built via the establishment of a separate company with Gudmundsson, who has property businesses throughout the world, using the expertise at his disposal.

There are also advanced plans to appoint a technical director, with a background in European football, to work alongside manager Alan Curbishley and oversee the building of a new training ground and overhaul the club's medical and physiotherapy departments. The new man will also be expected to create a world-wide scouting network to rival that of Arsenal and Manchester United. Interviews have already taken place with candidates such as the former Brazilian player Leonardo and Franco Baldini.

Gudmundsson is realistic about what he expects from Curbishley and the club. He is content with a mid-table finish this season especially after the trials and tribulations of the last campaign, when relegation was only staved off by an incredible run of seven wins from West Ham's last nine League games, and the Carlos Tevez affair.

But Gudmundsson then wants West Ham to push into Europe and to challenge for a Champions League place. He is willing to pour more finance into the transfer market, though major purchases are not expected in January, partly because Curbishley has not had anything near a fit squad so far this season, and building the club. But Gudmundsson is also adamant, according to sources, that it will be run as a proper business. His ambitions are said to have even stunned Curbishley.

Gudmundsson is a fantastically successful businessman, among the world's richest 800 according to Forbes magazine though, apparently, not as wealthy as his son, Thor. The 67-year-old is a former footballer (a youth team player at KR, Iceland's most successful club of which, at one time, he was also chairman), furniture packer and law student, a recovering alcoholic of 30 years, and a philanthropist. In the 1990s he was sentenced to 12 months in prison, suspended for two years, for book-keeping offences which many in Iceland believe was a result of a political campaign against him. He went to Russia, remade his fortune and returned triumphant to Iceland, where he has interests in banking, shipping, publishing, food, communications as well as property. These reach throughout the world.

It was unclear yesterday whether Magnusson would be retaining his five per cent stake in West Ham.