The head of Ford's European operations quit unexpectedly yesterday, just a month after reporting what are thought to be its worst quarterly results.

Ford, the world's second-largest carmaker, said Mr Martin Leach had resigned as president and chief operating officer "to pursue new opportunities". The company insisted that Mr Leach had not been forced out.

His exit comes as Ford is struggling to return its European business - which does not include European-based luxury brands such as Jaguar and Volvo - to profitability.

Ford lost $525 million (€464.6 million) in Europe in the second quarter, hit by a price war, a shift to cheaper models and a weak market.

The development will be another blow to Ford's efforts to implement a European turn-around plan, devised by Sir Nick Scheele and Mr David Thursfield, both now in senior positions at the group's Detroit headquarters.

The pair took the plan's approach of reducing parts costs while modernising the vehicle line-up to the US with them, and it was used as the basis for a group-wide revitalisation plan - adding embarrassment to the financial pain caused by Europe.

Mr Rod Lache, auto analyst at Deutsche Bank in New York, commented: "It has been an issue for investors. It would be great if we could build faith in the \ plan by looking at another market and seeing that it has worked there."

Mr Thursfield, president of international operations, and chairman and chief executive of Ford of Europe, will do Mr Leach's job until a replacement is found.

"Martin contributed to our growth in Europe under challenging conditions," he said. "We will build upon that foundation."

Ford said earlier this summer that the current quarter would improve "significantly" for the European operations. Sir Nick said this week the second half would be significantly better.

Ford has one of the most negative outlooks for the European mark et, predicting it will drop 5 per cent, against a typical 3 per cent fall forecast by rivals.