Aston Villa have confirmed that manager David O’Leary has left the club by mutual consent.

His departure follows an inquiry by the club’s board into a statement criticising chairman Doug Ellis that was issued by the squad.

“Although no misconduct by O’Leary was uncovered, it has been agreed that an amicable parting was in the best interests,” said a Villa statement.

“Accordingly, a compensation package reflecting the situation has been established and it has been mutually agreed to terminate the contract of David O’Leary, with immediate effect.”

O’Leary took charge of Villa in June 2003 and took the Midlands side to sixth in the Premiership in his first season. But with the club finishing 10th in the 2004-2005 season and 16th in 2005-2006, pressure on the manager was growing, and his relationship with supporters had deteriorated.

Aston Villa also issued a statement to the Stock Exchange to clarify the situation about the club’s ownership.

“Shareholders and supporters will be aware that Aston Villa has been in an official offer period since 19 September 2005, when the AVIL consortium made an initial approach to the company.

“As previously announced, the board appointed Rothschild as an adviser to examine the AVIL proposal and can confirm that there have since been a number of other approaches from various parties, both from the UK and overseas.

“Extensive discussions involving Rothschild, the chairman, Doug Ellis, and credible parties are ongoing and will be fully explored to determine whether a formal offer for the issued share capital of Aston Villa will be forthcoming.

“However, there is no certainty that any of these discussions will lead to an offer being made. Shareholders and supporters will be updated in due course.”