Gavin O'Reilly has resigned as chief executive of Independent News and Media.

It is understood he cited the recent shareholder activism as becoming a distraction from the running of the company.

He will be replaced by Vincent Crowley, the company's chief operating officer and the former head of INM's Irish operations.

A statement from the company today said that Mr O'Reilly's departure follows a ''compromise agreement'' approved unanimously by the INM board of directors.

Mr O'Reilly has been with the company since 1993 and has held several senior management roles at the group.

Independent News and Media is the country's biggest newspaper publisher and it has been controlled by the O'Reilly family since the 1970s.

Six years ago telecoms entrepreneur Denis O'Brien began to buy shares in the company.

Since then the fractious relationship between the two sides has seen Tony O'Reilly stand down as chairman while Mr O'Brien gained more seats at the board. He owns the largest stake in the company at 22%, while the O'Reilly family holds 13%

In recent months Dermot Desmond has bought into the group and now owns 6%. It also emerged today that another unrelated party may be building a stake in the group as 2% of INM shares were snapped up.

Over the past year Denis O'Brien had been calling for Gavin O'Reilly to stand down and it had been expected that O'Reilly's role would be put to vote of shareholders in June. Matters came to a head today with a board meeting at the the company's headquarters in Citywest, Co Dublin.

The development today increases Mr O'Brien's share of the Irish media scene. He already owns owns radio stations Today FM, Newstalk, 98FM, Spin 1038, Spin South West and Phantom.

In today's statement, INM chairman James Osborne said that Mr O'Reilly '' leaves by mutual and amicable agreement and has the great appreciation of the board and that of his colleagues''.

Gavin O'Reilly said that after 19 years at the company it was time for him to pursue new opportunities.

''It has become clear that recent and public shareholder tensions were proving an unnecessary distraction for both me and the company and this was not in in the best interests of the board,'' he said in today's statement.

''The board and I agreed that what the company needs now is a board, management team and shareholder base that is purposefully unified and aligned for the company's immediate challenges and for the many opportunities that exist in the future,' he added.

Independent News and Media, which has big debts, has radically restructured over the past two years. It sold its flagship British title the Independent and interests in India, and also shut down loss-making newspapers in Ireland including the Sunday Tribune and the Irish Star on Sunday.

INM shares closed 6.5% higher at 24 cent in Dublin this evening.