Walter Smith has resigned as Rangers chairman and left the board amid a bitter struggle for power at Ibrox.
Smith has stepped down three days after former chief executive Charles Green returned to the club as a consultant and issued a public warning to manager Ally McCoist over his long-term future.
In a statement to the London Stock Exchange, the club said: "Rangers announces that Walter Smith has today resigned from his position as chairman and a director of the company with immediate effect."
Smith joined the board in November last year in what was a huge coup for Green, who had rejected a bid from a consortium led by the former Rangers manager immediately after buying the liquidation-bound club's assets and business in June.
Smith was then elevated to chairman in May following the departure from the board of Malcolm Murray, a month after Green himself quit as chief executive amid an investigation into his links with former Rangers owner Craig Whyte, although he denied any wrongdoing.
However, the tension and split at the heart of power which was once defined through Murray and Green's fractious relationship continued to simmer under the surface until a group of disgruntled shareholders launched a bid for boardroom power last week.
Green's first act after being appointed as consultant was to conduct a press interview in which he stated McCoist had to win a cup this season, and implied that his successor Craig Mather had been too generous with his player budget.
Hours later, Rangers crashed out of the League Cup at Forfar before McCoist launched a stinging attack on Green, branding him an "embarrassment" and accusing him of having contempt for the club and Scottish football in general.
McCoist today described his mentor Smith as the "glue" that was holding Rangers together and his resignation adds to the huge uncertainty over the direction of the club.
Rangers announced on Friday that a group of shareholders had made an official request for the removal of Mather along with Brian Stockbridge and Bryan Smart, two of Green's allies.
The requisition called for the appointment of Paul Murray, a director of the oldco Rangers before Whyte's takeover, whose Blue Knights consortium lost out to Green's group in their bid to take control at Ibrox.
It also called for former PricewaterhouseCoopers Scotland executive chairman Frank Blin to join the board.
It is understood that businessman Jim McColl, who combined with Smith in last summer's takeover bid, is involved in the bid to install Blin to carry out a forensic examination of the club's finances amid concern over the corporate governance.
The group are believed to hold approximately 30 per cent of shares in Rangers but are hopeful of persuading enough institutional shareholders and supporters to back their bid.
It is believed Rangers had 21 days to respond to the requisition and would have another 21 days to constitute an extraordinary general meeting to vote on the request.
Smith's departure is the latest in a number of changes in the corridors of power since Green quit as chief executive.
After Phil Cartmell left the board along with Malcolm Murray, James Easdale joined and Rangers changed their nominated adviser and broker from Cenkos Securities to Strand Hanson.
Today they announced the additional appointment of Daniel Stewart & Company plc as corporate broker with Strand Hanson remaining as nominated advisor.