Carolyn McCall, the chief executive of Guardian Media Group, has resigned from the board of Tesco because of the supermarket’s pending libel suit against the company’s flagship newspaper.

Ms McCall’s resignation comes as Tesco said last week it was suing The Guardian over a story that alleged that the company used offshore companies to avoid paying £1 billion in taxes.

Ms McCall’s decision to leave her nonexecutive position at Tesco came a day after she was announced as Veuve Clicquot Businesswoman of the Year.

The retail giant, which has a 30 per cent share of the UK market, is taking legal action against The Guardian and Alan Rusbridger, its editor, after a series of articles. Tesco has strongly rejected the claims, saying it told the newspaper numerous times that the allegations were untrue and its denials were not published.

The Guardian has claimed that Tesco’s actions amounted to bullying and were intended to silence public debate on the important issue of taxation.

David Reid, Tesco’s chairman, said: “It is with regret that I accept Carolyn’s resignation from the board. She has been a good nonexecutive director at Tesco and has made a strong contribution to the success of the business.”

Ms McCall said: “It is with regret that I have decided to resign from the Tesco board, but given the clear conflict of interest it would be inappropriate for me to continue in the role.”

Sources said that Ms McCall has been talking to the Tesco board about her future at the supermarket giant since early this week.

In its complaint, a week ago at the High Court of Justice, Tesco said that the articles alleged the company was avoiding paying United Kingdom taxes and were a “devastating attack on its integrity and ethics”.

The newspaper has said it did not accuse Tesco of acting illegally at any point but that its actions had raised questions of public interest.

Ms McCall, 46, has held senior executive positions at GMG for more than a decade. Prior to her appointment as chief executive of the entire group, she was the chief executive of GMG’s newspaper division. While in that role, she oversaw the move of The Guardian from a broadsheet format to the new Berliner style.

She was active in the sale of a stake in Trader Media Group to Apax for £675 million last year and recently acquired Emap’s business-to-business titles alongside Apax for £1 billion.

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