Topshop saviour's threat to quit over Kate

Jane Shepherdson, the director of Topshop who is credited with transforming its fortunes, was said to be on the verge of resigning over the decision to hire Moss as a designer.

The dispute has cast a shadow over what was previously seen as a masterstroke — teaming up the most famous face in fashion with one of the coolest high street names.

Ms Shepherdson claims she was not consulted properly over the hiring of Moss, it was reported today.

She is said to be in last-ditch talks with Sir Philip Green, boss of Topshop's parent company Arcadia. Friends of Ms Shepherdson have said that relations with Sir Philip broke down following the contract with Moss, which was announced before London Fashion Week last month, according to today's Times.

It was Sir Philip's name which was linked with the deal, not Ms Shepherdson's. Sir Philip met Moss last summer when he bid £60,000 at a charity auction for a kiss with her — only to pass on the prize to Jemima Khan.

Further meetings between the stores mogul and the supermodel prompted rumours that they were considering a collaboration, although many doubted Moss would commit.

What persuaded her, according to Sir Philip, was that "she knew she could trust us".

He said when the deal was announced: "So many celebrities have been ripped off when they've collaborated on lines, but she knows that we're serious. This is about Kate developing her career beyond modelling."

However, it now seems that Sir Philip overlooked the need to keep onside the woman who made Topshop what it is today.

Once seen as a purveyor of forgettable tat, Topshop is now a cool place to shop for everyone from teenagers to celebrities — and Ms Shepherdson is the woman who deserves the credit.

Once named the most important woman in fashion by Drapers, the fashion business journal, she has masterminded Topshop's 10-year transformation to crown jewel in Sir Philip's empire.

It has sales of £600 million, is expected to produce profits of £100 million this year, and is planning stores in Russia, New York and Paris.

As well as having a flair for design, and the judgment and confidence to recruit unknown, talented young designers, Ms Shepherdson has introduced such innovations as VIP rooms and personal stylists, once the preserve of more upmarket stores.

Ms Shepherdson's threatened departure comes after a bad week for Sir Philip, who was forced to concede that a 54 per cent plunge in operating profits at his Bhs chain had been "self-inflicted".

Ms Shepherdson was said to be unavailable for comment, as was Sir Philip.