Dominic Lawson’s ten-year reign as editor of the Sunday Telegraph came to an abrupt end yesterday — making him the most senior editorial casualty since Sir David and Sir Frederick Barclay bought the Telegraph titles last summer.

He was immediately replaced by Sarah Sands, the well-regarded deputy editor of the Daily Telegraph, who told journalists at the paper that her mission was to make the right-wing title "have the appeal of an iPod — lovely to look at and full of all your favourite things".

Technically, Mr Lawson’s departure was billed as a resignation, but one insider said that that he had been victim to "an old-style Fleet Street sacking", which he had not been expecting when he came into work yesterday morning. It was agreed that he could resign so he could save face.

Mr Lawson was summoned to see Murdoch MacLennan, the chief executive of the Telegraph Group, on the pretext of discussing the newspaper’s defence of the ongoing libel action in which footballer Harry Kewell is suing comments made by the title’s football columnist Gary Lineker.

Instead, Mr Lawson was told that he was being asked to leave the title immediately. Journalists at the newspaper were surprised to discover that Miss Sands had arrived at around 2pm to introduce herself as editor and make a speech to staff at its Canary Wharf headquarters.

Mr Lawson’s ousting also appears to bolster the position of the Daily Telegraph's editor Martin Newland, who was appointed by Lord Black, the newspaper’s previous owner shortly before the peer was himself forced out amid allegations that he had been taking money from the company.

Mr Lawson had hoped to succeed Mr Newland after Sir David and Sir Frederick Barclay took over, a case that was strengthened when, in a rare interview given in January of last year, Sir David said that "Dominic Lawson is a very good editor of the Sunday Telegraph".

However, 48-year-old Mr Lawson, a perfectionist with a combatitive style, appears to have fallen out with Mr MacLennan. Friends of the outgoing editor said that he frequently clashed with newspaper executives as he battled for more resources.

The Sunday newspaper has also struggled to maintain circulation against better-selling rivals. Its average circulation between December and May was 690,000, down 1.6 per cent, compared to 1.36 million for the Sunday Times, and 2.36 million for the Mail on Sunday, both of which were unchanged on the previous year.

Sarah Sands, 44, deputy editor since 1996, had been given control of the Daily Telegraph’s Saturday edition, shortly after Mr Newland’s appointment. Journalists at the Daily said that Mr Newland was marginalised from decision-making with respect to Saturdays, the newspaper’s best selling issue which has a circulation in excess of 1.1 million. The Daily’s average headline sale is 915,000.

The shift in jobs is expected to be a prelude to a wider reshuffle at the two newspapers.

In particular it is not clear whether Kim Fletcher, the Telegraph’s Group’s editorial director, will feel able to stay on. Mr Fletcher is married to Sarah Sands, and journalists at the paper believe that he may feel there would too obvious a conflict of interest for him to continue.

If Mr Fletcher did leave, that could create an oppotunity for the Telegraph’s owners to appoint Andrew Neil, who acts as publisher and editor-in-chief for the other titles owned by the Barclay twins, including The Scotsman and The Spectator. Until now Mr Neil, a former Sunday Times editor, has been excluded from the running of the titles.

Married to Rosa Monckton, the chairman of Asprey & Gerrard, the upmarket jewellers, and the son of Lord Lawson of Blaby, the former Conservative Chancellor, Dominic Lawson was once accused under the cover of Parliamentary privilege of being an "MI6 operative" by Brian Sedgemore, then a Labour MP, a claim that he has denied.

Click here to read in full Sarah Sands' speech to staff.

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