Regan's senior lawyer quits to reduce `embarrassment'

The Co-op affair claimed another victim yesterday when one of the senior lawyers who advised Andrew Regan on his audacious pounds 1.2bn break-up bid resigned from his firm.

Travers Smith Braithwaite, the City legal firm, said Nigel Campion-Smith would leave at the end of the month to reduce the "embarrassment" the affair had caused it. Mr Campion-Smith, 42, was the key partner who advised Galileo, the Lanica Trust offshoot that was the vehicle for the Co-op's failed bid.

Alan Keat, senior partner at Travers Smith said: "When our firm's involvement in the bid was criticised, Nigel felt responsible for the embarrassment which the firm suffered and he made clear his wish to do everything possible to reduce that embarrassment.

"Having deliberated fully, he and we feel that the interests of the firm would be best served if he were to leave the partnership and we have therefore, with great regret, accepted his resignation."

The fall-out from the failed bid has been severely damaging for Mr Regan's former advisers such as Hambros Bank and Travers Smith.

Peter Large, the key corporate financier at Hambros who worked on the Co-op bid, has already stepped down from his executive duties pending the Norton Rose inquiry into the bank's role in the affair.

Hambros paid pounds 750,000 to the CWS in compensation for its role. Travers Smith is thought to have paid around pounds 500,000 in compensation.

The Norton Rose enquiry is expected to be completed soon. However, Alasdair Douglas, managing partner of Travers Smith, declined to say if the timing of Mr Campion-Smith's departure was due to the report's initial findings.

Travers Smith would not say if Mr Campion-Smith would receive compensation for loss of office. A Cambridge graduate, he has been a partner at the firm since 1982 and has been one of its most prominent figures.

The firm also declined to give the precise reasons for Mr Campion-Smith's departure, or whether other resignations would follow. "As far as we are concerned, the matter is closed," Mr Douglas said.

However, the Regan camp is understood to be unhappy about the legal advice it received during the bid.

The matter is now the subject of a Crown Prosecution Service and Greater Manchester Police investigation into alleged criminal activity.

Mr Campion-Smith was also involved in the setting up of County Produce, the Co-operative business formed by Mr Regan's team to act as a front for its break-up bid.

County Produce was set up in November 1995 as a corporate member of the CWS. The plan was to use it as a way of calling an emergency general meeting of the CWS to consider the Galileo proposal.

The Co-op affair is the second time in 10 years that Travers Smith has become embroiled in a City scandal.

It was the legal adviser to County NatWest in the Blue Arrow affair in the 1980s. However, the firm and Alan Keat, now its senior partner, were cleared of any wrongdoing.