The former England goalkeeper, who took charge at Home Park in March 1992, was suspended on full pay last week after failing to meet a deadline to pay an outstanding tax demand of £50,000. Yesterday, however, the rift between club and manager became permament.
"Plymouth Argyle have broken his contract," Michael Morrison, of Shilton's Manchester-based solicitors, Gorner and Company, said, "and therefore he has terminated his employment as a response to their breach of contract.
"Technically, Peter Shilton has not resigned. By their behaviour the club has discharged the contract."
Shilton, 45, also issued a writ against the club yesterday, seeking damages for breach of contract after they had not reinstated him as manager by a 5pm Monday deadline. In additon, Morrison revealed his client would not be attending a planned disciplinary hearing today "because he is no longer an employee of the club."
However, Ivor Jones, one of three directors due to preside at the hearing, said: "I feel it would be in his own interests to attend so he could put his side of the argument. There would be no solicitors present."
Meanwhile, Plymouth are bracing themselves to counter Shilton's claims. "The way I read it, he has resigned," the club chairman, Dan McCauley said. "He'll probably say he's been forced to resign but, as far as I'm concerned, he has resigned." The board will issue a fuller statement today.