The UK's number three retailer Sainsbury's has shelved plans to appoint Sir Ian Prosser as its chairman, in a direct response to widely voiced shareholder anger.

It was announced last week that the former head of Bass was to be appointed deputy chairman and due to step into the shoes of Sir Peter Davis in July 2005.

But institutional shareholder opposition was apparent immediately and has grown in force in the last three days.

After the reaction to his appointment, a Sainsbury's statement said Sir Ian had decided to withdraw from the position.

"The board of J Sainsbury plc and Sir Ian Prosser have each considered carefully the reaction of certain institutional shareholders consulted on the appointment of Sir Ian Prosser as deputy chairman and chairman designate," it said.

"As a result, Sir Ian has concluded that it would not be in the best interests of the company to proceed and has consequently decided to withdraw."

Shares in Sainsbury's recovered on the announcement, closing at 294.5p.

Investors were unconvinced that he was the best person to help turn round Sainsbury's, which is losing ground to its rivals.

It has been rumoured that his performance at Bass, which was far from impressive, was the major reason for the disquiet - and that shareholdrs of Sainsbury's want a stronger personality and business mind, rather than the safe hands approach of Prosser.

In an ironic precursor to this week's events, Sir Ian's management style also received criticism in the past for its lack of shareholder consultation.

This time it was Sainsbury's board that attracted criticism for not paying the views of its shareholders enough attention.

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