Robert Breare, the executive chairman of Merchant Inns, the pubs-with-rooms operator, has been forced out of the group by business partner Sir John Ritblat.
It is thought that the entrepreneur's departure from the five-strong group follows what sources describe as an "angry and fundamental dispute" over the performance of the company and future strategy.
Colin Wagman has taken control of day-to-day operations, assisted by Michael Cohen, who recently joined the group as finance director.
A spokesman for the group said it would launch the search for a chief executive in the wake of Breare's departure.
She said: "Sir John Ritblat, the principal investor of Merchant Inns, remains fully committed to the business and intends to provide further resources to cement a long-term successful future for the group with the view to building on the brand's exciting and unique positioning in the market."
Breare and Ritblat - who built the British Land business - teamed up to grow the freehold pub concern in 2007, with plans to expand the estate across the UK. They formed Kamside, an investment vehicle, to purchase the five-strong portfolio for about £20m, including £10m of debt.
Breare told M&C: "I'm very proud of all that we as a team have achieved at Merchant Inns. It is a great business model and I believe trading is very much at the upper end of the industry.
"The company, its pubs and many individuals within it have received a huge number of accolades over the past two years."
Breare, who founded the Noble House business, also chairs Individual Restaurant Company, the Piccolino operator.
The strategy at Merchant Inns was to purchase pubs that could be developed into food-led propositions with a significant rooms business plus ideally conferencing and events facilities too.
One of its properties – the Horse & Groom Inn near Malmesbury in the Cotwolds – recently featured in the top five of the Morning Advertiser's list of best pubs in the country. Merchant’s other properties are: the Lambert Arms in Watlington (Oxfordshire); the Talbot Inn in Ripley (Surrey); the Carnarvon Arms, Newbury (Berkshire); the Black Boy Inn, Banbury (Oxon).
