BP CHIEF executive Lord Browne resigned yesterday after the lifting of a legal injunction preventing a newspaper group publishing details of his personal life.
The resignation comes after Lord Browne lost a legal battle to keep the details of his four-year relationship with Jeff Chevalier private after his former partner spoke to Associated Newspapers.
He admitted that he had lied over how he first met Mr Chevalier, but added that his former lover's allegations were full of "erroneous and misleading claims".
Lord Browne said he was stepping down after 12 years at the head of the company to save BP from embarrassment.
The shock decision will cost him up to 15.5 million in lost retirement and share options.
He said: "This is a voluntary step which I am making to avoid unnecessary embarrassment and distraction to the company at this important time."
Lord Browne was accused of using BP's resources and manpower to support or assist Mr Chevalier by using BP computers and support staff, the involvement of BP personnel in setting up and then winding up a company created by Lord Browne for Mr Chevalier to run, and the use of a senior BP employee to run a personal errand by delivering cash to Mr Chevalier.
But Peter Sutherland, the BP chairman, said a review of the allegations of misusing company assets and resources had found they were "unfounded or insubstantive".
Mr Sutherland added: "It is a tragedy that he should be compelled by his sense of honour to resign in these painful circumstances."
In his resignation, Lord Browne hit out at the Mail on Sunday, which is owned by Associated Newspapers.
In a statement, Lord Browne said: "In my 41 years with BP I have kept my private life separate from my business life. I have always regarded my sexuality as a personal matter, to be kept private.
"It is a matter of deep disappointment that a newspaper group has now decided that allegations about my personal life should be made public."
However, a spokesman for the Mail on Sunday welcomed the legal ruling. He implied that Lord Browne could also face charges of perjury after the Mail on Sunday said it would make its evidence available to Lord Goldsmith, the Attorney General.
The spokesman said: "Jeffrey Archer and Jonathan Aitken went to prison for lying to the courts. Despite lying to the court, Lord Browne was granted an injunction suppressing information of great importance both to the millions of Britons who, through their pensions, are shareholders in BP, and to the tens of thousands who work for the company."
Analysts reacted with sadness to the news of Lord Browne's departure.
One said: "It is such a shame that his tremendously successful career at BP has been ended in this way."
Another added it was "a sad day" for the oil industry.
And David Buik, of spread betting firm Cantor Index, said: "For ten of the 12 years of his stewardship, he was a magnificent chief executive."
The dramatic end to Lord Browne's career comes after a turbulent two years for the oil major. BP has been criticised for safety lapses over the March 2005 explosion at its Texas City oil refinery, which killed 15 people, in two independent reports this year.
Despite other problems, including the discovery of pipeline corrosion at its Prudhoe Bay field in the US, BP still made profits of 11.34 billion during 2006 due to higher oil prices.
Peter Bottomley, a former Tory minister, said: "MPs who know and admire John Browne will regret his decision. It is typical he has put his judgment of the company's interests before his own."
• AS the law stands, the UK has no privacy act which automatically protects citizens, although article eight of the European Convention on Human Rights states that "everyone has the right to respect for his private and family life, his home and his correspondence". The right of newspapers to expose wrong-doing now comes under the same convention. That system is underpinned in the UK by the fact that newspapers agree to be bound by the Press Complaints Commission. Ofcom supervises TV and radio complaints.
Privacy issues are most commonly tested by tabloid newspapers, typically when it comes to reporting on the activities of celebrities. Legal argument often centres on whether public figures who seek publicity have the same expectation of privacy as an ordinary person.
John Scott, a human rights lawyer, said he believed the Lord Browne case could hasten the creation of a formal privacy law.