The head of one of BT’s key divisions has resigned in a move that is expected to trigger a shake-up at the top of the telecoms group.

The company said last night that Paul Reynolds, the head of BT Wholesale, which generated nearly £8 billion of revenues last year, would be leaving in September to become chief executive of Telecom New Zealand.

Dr Reynolds, who joined BT in 1983 straight from university, had been regarded as a possible successor to Ben Verwaayen, BT’s chief executive. He held posts in marketing and product management and was director of the Office of the Chairman before being made head of Wholesale in 2000. He was appointed to the board in November 2001.

The 50-year-old has played a key role in managing BT’s 2005 settlement with Ofcom, the regulator, under which a new “independent” division, called Openreach, was created to oversee access to BT’s local network.

The departure of Dr Reynolds comes after a recent restructuring in BT. The revamp involved the creation of two new divisions, BT Design and BT Operate. Andy Green, formerly head of BT’s global services division, was named as head of strategy and operations.

The move triggered speculation that Mr Green was being groomed as a possible successor to Mr Verwaayen. The speculation was denied by Mr Verwaayen, who said that there was no such “drama”.

However, the Dutchman, who has been at BT’s helm since 2002, has indicated that his tenure in the company might not extend for many more years.

Sir Christopher Bland, the chairman, who has worked closely with Mr Verwaayen, is himself to step down this summer.

The shake-up was also deemed a blow for Dr Reynolds, who saw responsibility for the creation of BT’s new network pass to Mr Green. Industry sources said that Dr Reynolds was frustrated about his shrinking responsibilities.

Mr Verwaayen last night paid tribute to his colleague’s “fantastic contribution to BT over more than 20 years”. He said that Dr Reynolds had played a key part in delivering broadband in the UK and in the design and creation of BT’s Openreach unit. Openreach is supposed to ensure rivals have fair access to BT’s local network.

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