Browne and his ex-lover: the full court case

Britain’s most powerful businessman resigned this afternoon after it emerged that he lied to a court about his relationship with a former gay lover.

Lord Browne of Madingley quit as chief executive of Britain’s biggest company after the devastating allegations were made public following a House of Lords ruling that rejected his legal bid to keep the details secret.

He also lost a court battle to keep secret allegations that he misused the assets of the oil giant BP.

Lord Browne, who had been due to step down in the summer, will be replaced by his designated successor Tony Hayward. BP, which said it accepted Lord Browne’s resignation with the “deepest regret”, said that the chief executive would lose his entitlement to a leaving package worth £3.5 million and a potential £12 million in shares.

Lord Browne may now face a criminal charge of perjury after lying to the High Court about how he met Jeff Chevalier, a student from Canada.

His sudden resignation, announced at 3.45pm, stunned the City. Since becoming chief executive in 1995 he has turned BP into one of Britain’s most successful companies. He has was knighted in 1998 and made a life peer in 2001.

However, his resignation became inevitable after it emerged that he had lied to the High Court in his bid to prevent his former lover revealing details of their relationship.

Following his resignation, Lord Browne said: “I wish to acknowledge that I did formerly have a four-year relationship with Jeff Chevalier.

“He has made these allegations about me and our relationship to Associated Newspapers, publishers of The Daily Mail, Mail on Sunday and Evening Standard.

“The allegations are full of misleading and erroneous claims.

“I deny categorically any allegations of improper conduct relating to BP.

“The company has confirmed today that it has found no such wrongdoing.

“My initial witness statements, however, contained an untruthful account about how I first met Jeff.

“This account, prompted by my embarrassment and shock at the revelations, is a matter of deep regret. It was retracted and corrected.

“I have apologised unreservedly, and do so again today."

Lord Browne, 59, had told the High Court that he had met Mr Chevalier by chance, while exercising in Battersea Park, South London. He later admitted that was untrue.

Mr Justice Eady, in a High Court judgment, said that although Lord Browne had apologised he was not prepared to make allowances for a “white lie” told to the court.

He added: “... especially by a man who prays in aid his reputation and distinction, and refers to the various honours he has received under the present Government, when asking the court to prefer his account of what took place.”

It was ironic, said the judge, that Lord Browne should choose to tell this lie at a time when he was maintaining that the court should heavily discount Mr Chevalier’s account.

“A wholesale attack was being made on his credibility. It was said that he is a liar, unstable and adversely affected by dependence on alcohol and illegal drugs.”

Mr Justice Eady said Lord Browne’s assertion that Mr Chevalier was an alcoholic “seems largely to have been based on an inference he drew when his butler told him that his wine stocks were diminishing”.

When Mr Chevalier voluntarily disclosed his medical records, it emerged that they contained virtually no support for the allegation of significant alcohol and drug dependence at the material time.

He added: “It is thus clear that it is not only the claimant’s willingness to tell a deliberate lie to the court, persisted in for about two weeks, that is relevant in assessing his own credibility and the overall merits.

“So too is his willingness casually to ‘trash’ the reputation of Mr Chevalier and to discredit him in the eyes of the court.”

Mr Justice Eady concluded: “I could refer the matter to the Attorney-General but I cannot think that anything would be achieved by doing so. In any event, it is probably sufficient penalty that the claimant’s behaviour has had to be mentioned in this judgment.”

Mr Chevalier has also revealed details of meetings that Lord Browne had with Tony Blair, Gordon Brown, the Chancellor and Peter Mandelson, the European Trade Commissioner.

He claimed that Lord Browne discussed with Mr Blair and the Chancellor the prospect of BP potentially taking an important strategic decision. It is also alleged that the Chancellor opposed a scheme which would have benefited BP’s customers.

Lord Browne stunned the City in January when he announced that he would retire in July from the company where he had spent his entire career. The announcement of his retirement, a year earlier than expected, occurred just days after the Mail on Sunday contacted BP with allegations about his relationship with Mr Chevalier.

Lord Browne is on first name terms with most leading figures in new Labour and his closeness to the Government has led to critics referring to BP as “Blair Petroleum”. He is also a director of Goldman Sachs.

But his legal action to prevent publication of the allegations ended this morning when the House of Lords judicial committee refused him leave to appeal against the Appeal Court’s refusal to continue an injunction against the Mail on Sunday. The Lords also said that Mr Browne should pay the newspaper’s legal costs.

He had sought the injunction on the basis of breach of a confidence, breach of privacy, the right to a private life and freedom of expression under the European Convention on Human Rights.

Lord Browne’s defeat in his battle to keep the details of his private life from the public brings a disastrous year in the life of Britain’s most successful businessman to a traumatic end.

The BP chief executive has increased the value of the company he runs five-fold over the past decade, pouring more money into British pension funds than any other single business.

But he has long insisted that his leadership of a multinational British company does not open him to public scrutiny in the way that has become common for politicians. He lived with his mother until she died four years ago and it has always been understood that he never told her about his relationships with men.

Lord Browne’s tormented year began last summer, when he started discussions with Peter Sutherland, the BP chairman, about staying on at the helm of the company, beyond 2008, when he is due to hit the company’s retirement age of 60.

He was eventually forced to announce an agreed retirement in 2008. But the months that followed have seen a drip-feed of damaging stories about BP, chiefly relating to the investigation into the Texas City refinery explosion which killed 15 people.

The report into the deadly incident found that BP had systematic failings when it came to plant safety. The last year has also been dominated by speculation over his successor, eclipsing any hopes Lord Browne had of bowing out on a high note.

In January, after he had been informed that The Mail on Sunday was planning to “out” him in the press, Lord Browne agreed to move forward the date of his retirement to July 2007. He has since been attacked by shareholders for a £10 million-plus payout from the company.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive