Stephen Burch, the chief executive of Virgin Media, resigned yesterday after a series of boardroom rows with Jim Mooney, the chairman, and Bill Huff, the key investor, left him with little choice but to leave the cable company after just 18 months.

It is understood that Mr Burch, who moved from the United States to take the job, felt unable to run the business because all strategic decisions were being taken by Mr Mooney, based in New York, and Mr Huff, who chairs the executive committee.

Mr Burch will receive a $7 million (£3.53 million) payoff in return for agreeing not to help any would-be bidders for Virgin Media over the next 12 months, as he departed immediately for what the company described as “family and personal reasons”.

Mr Burch, although nominally chief executive, was described by insiders as “third in the hierarchy, at best” at a company where “decisions that should be taken in the UK were being made in the United States”. In particular, Mr Burch was not thought to be a supporter of the bid by NTL for ITV – an act initiated by a phone call from Mr Mooney to the commercial broadcaster’s then chairman Sir Peter Burt.

It is the second time that a chief executive of the cable group has departed unexpectedly in the past three years. Simon Duffy, the previous incumbent, was moved suddenly into the titular role of executive deputy chairman in December 2005 to make way for Mr Burch after a similar falling-out.

The alliance between Mr Mooney and Mr Huff dates from the rescue of the near-bankrupt NTL by a group of hedge funds led by Mr Huff. He recruited Mr Mooney and has remained the power behind the throne ever since, even though he has cut his fund’s shareholding to 4.5 per cent. However, Mr Huff retains considerable power because he remains chairman of the executive committee. He is understood to ask for information daily from the company’s executives and he is still able to control who is hired and how money is spent.

The internal problems were one of the factors that prompted Carlyle Group, the venture capital firm, to make an approach at $33 a share, with the view of moving the management of the business to the UK after buying out Mr Huff and removing Mr Mooney. That move collapsed after Virgin Media decided to hire Goldman Sachs to conduct an auction of the company just as the global credit crisis made it impossible for venture capital groups to borrow the sums required.

Mr Burch’s departure comes just as it became clear that a sale may not happen until 2008. He will be replaced temporarily by Neil Berkett, the chief operating officer. Virgin Media shares eased 13 cents to $22.66 in lunchtime trading in New York.

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