L&G goes on attack over Rose promotion

L&G had already expressed its disquiet at the move, which is in clear breach of City corporate governance guidelines.

After hearing chairman Lord Burns and incoming deputy chairman Sir David Michels put the case for giving Rose more power, the fund manager issued an unusually public rebuke.

Tricky talks between major companies and traditional City fund managers normally go on in private. That L&G, which has 4.3% of the stock, feels moved to make public statements shows the depth of its concern.

Mark Burgess, head of equities at L&G, said: "While we understand their arguments, we do not agree that this is a necessary structure to allow for the successful appointment of a successor to the current chief executive. We do not support a dilution in corporate governance standards, particularly in leading UK companies."

Sir Stuart's promotion from chief executive was supposed to allow the company to keep one of retail's most talented individuals at the helm while allowing it to identify a successor from within the ranks. It now looks in doubt, given that L&G's irritation may prompt other investors to come into the open.

The Association of British Insurers has already raised its own doubts, saying: "M&S has a lot of work to do to persuade people this is the right approach."

The concern is that Rose will have too much influence, being unchallenged either by a powerful senior director or a deputy chairmanwho isn't regarded as a close colleague. Critics say that M&S has failed in its duty to investors by not properly schooling a serious candidate to replace Rose before now.

Today the company merely repeated its earlier position, which is that it has consulted half its major shareholders and that most are "broadly supportive" of the management shake-up.

It recently emerged that M&S gave L&G just one hour's notice of its intention to overhaul the board, a move which will allowRose to force through the changes he believes are necessary to secure the long-term success of M&S.

If shareholder pressure forces M&S to backtrack on its decision, it would leave Rose's position in serious doubt. At worst, he could even quit the business - the last thing M&S would want.