Board's refusal to pay Southend defender's wages was last straw for Collins at Hibs

In a day of high drama in Edinburgh, the former Scotland midfielder quit after he reached the conclusion that the gap at Easter Road between balancing the books and investing in new players had become an unbridgeable chasm. Having decided that he could no longer satisfy his ambitions with the club which gave him a start as a player as well as a manager, he shocked the club's directors at the regular monthly board meeting by tendering his resignation and resisting all subsequent attempts to change his mind.

Although he opposed but eventually had to accept Hibs' decisions to sell players during his 14 months in Leith – Scott Brown, Kevin Thomson, Steven Whittaker and Ivan Sproule raised fees of nearly 9 million – it was evident Collins felt the level of re-investment in their replacements was short of the standard required to maintain the club's profile in the days ahead as serious challengers to the Old Firm.

Collins expected to lose full-back David Murphy sooner rather than later, and is understood to have identified Steven Hammell, a former Motherwell player, as a replacement. He was confident that the player could be lured to Easter Road on the same wages he was on at League One side Southend, with a sizeable transfer fee expected to be received for the sale of Murphy. However, the directors were not prepared to match Hammell's salary and the player would have needed to take a wage cut to join.

The Scotsman understands that Collins has been concerned for several months about the failure of the Hibs board to release funds raised through the sale of players to strengthen the team, and has grown increasingly frustrated. The expected sale of Murphy, once again without adequate replacement, was the final straw.

Having guided Hibs to success in the CIS Cup, Collins examined the modest resources at his disposal and reasoned he was unlikely to challenge for more silverware unless more money was invested in new players. "I love a challenge but I have come to the conclusion as a young ambitious manager that I don't really like treading water any more," he told reporters at a press conference. "That is the job. It has extra high expectations and I'll now be judged by many people."

Unlike most in employment, Collins, 39, earned enough during a playing career with Hibs, Celtic, Monaco, Everton and Fulham not to fret over job security. Collins was in charge at Easter Road because he wanted to work there. When the terms of employment no longer met with his approval, he didn't shirk the decision to walk away.

There had been speculation ever since Rod Petrie, the chairman of Hibs, met with a group of disgruntled players unhappy with Collins' handling of the squad, that the relationship between chairman and manager was uncomfortable. Petrie denied the suggestion and described their working arrangements as "entirely positive". However, the fact Collins departure came as such a complete shock to the board, indicated the manager was unwilling to take the chairman into his confidence. "I felt it was the time invest a bit more in the team to take us forward, but I respect Hibs," he reflected. "The club has raised a lot of money in my time as manager. We have taken in 8.8 million in transfers and invested 360,000 in compensation for players."

Hibs countered by saying 1 million has been invested in new players this year. "If you go back and look at our accounts in July," said Petrie, "the expenditure on securing players was nearly 1 million rather than 360,000. We've talked about continuing to develop the squad and are spending more this year than we did last. And we have brought the manager's targets to the club, the ones he identified in the summer."

SIR TOM SHOCKED

HIBS owner Sir Tom Farmer said he was shocked by John Collins' departure, 24 hours after they both helped open the club's new training centre. "It was a complete surprise to me," said Sir Tom. "It was only yesterday we were talking about the future and the training centre. I had no inkling. It is a disappointment at this time."