A key supporter of modernisation at Oxford University has finally succumbed to traditionalists opposed to changes in the 900-year-old institution.

Sir Victor Blank, the Chairman of Lloyds [Get Quote] TSB, resigned from the varsity's ruling council and declined to seek re-election to the body after Oxford authorities rejected a new plan to hand over control of the ancient university to business and political leaders.

Dir Blank was one of the main backers of the move which aimed at radically changing the way the university is being run. He had suggested introducing outside business expertise into the institution in a bid to raise Oxford's financial profile and promoting stronger ties with the British government.

But the plan was shelved following a fierce row with traditionalists who feared that the changes will erode the university's ethos and lead to an increase in bureaucracy.

Sir Blank's resignation will also put pressure on Oxford's Vice-Chancellor Dr John Hood, who drew up the modernising agenda.

In a statement, the council said "we are deeply grateful to Sir Blank for his invaluable wisdom, insight and expertise".

Sir Blank was the first outsider in the university council following a decision to appoint non-academics in 2000. His second term was due to finish at the end of this month.