In an embarrassing and unprecedented move, the ICAEW's incoming president Graham Durgan has been forced to step down after revelations that his company EWI had been awarded recommended supplier status by the institute.

Accountancy Age broke the news yesterday that Durgan had been forced out, and the ICAEW has since laid the blame for Durgan's exit on the press.

In a statement, the ICAEW said Durgan had 'always declared his interests in accordance with the institute's code of conduct' and that 'his dealings with the institute have always focused on the best and proper interests of the ICAEW'.

The institute said that throughout the application process for recommended supplier status, Durgan and his businesses acted with 'complete integrity'.

Despite his embarrassing exit at a special council meeting yesterday, Durgan has been co-opted back onto the back onto Council and leads the institute's financial literacy initiative with UK schools.

Ian Morris will now serve for an additional six months as president and Richard Dyson will then to take over the presidency and be formally re-elected in June 2007.

In a letter to Morris, Durgan said 'the best course of action, both for the institute and for my professional interests, is to withdraw my candidacy for president of the ICAEW'.

Durgan added: ' I have come to conclude that it would be unsatisfactory for my presidency and for me personally to be dogged by continued speculation over these processes – however groundless and whatever motives there might be for such speculation.'

Responding to Durgan's letter, Morris said: 'I fully understand your reasons for taking this decision, which I can only accept with great regret. I appreciate what a difficult decision this must have been for you to make.'