The row between the suspended Irish director of Abbey who intends to establish a property development company, with residential land at Lucan, Co Dublin, and the company, has intensified following his resignation.

Mr David D'Alton, who has been employed by Abbey for 24 years, said his suspension "was completely unjustified" and he warned that he "will take all necessary steps to preserve my good name and professional integrity".

He said he "strenuously" denies any allegation of a possible conflict of interest while he was a director of Abbey and as an executive of the company.

"I tendered my resignation as both a director and an executive to the chief executive officer of Abbey (Mr Charles Gallagher who is also chairman) last week. It was then - and remains now - my intention to enter business on my own account."

Mr D'Alton said he deferred the effective date of his resignation as a director until July 29th and for his resignation as an executive until September 30th. However, in the light of Abbey's suspension announcement to The Stock Exchange, "I have tendered by resignation".

A spokeswoman for Abbey said she could make no comment until the investigation into whether there was any possible conflict of interest had been completed. An industry source said both Mr D'Alton and Mr Gallagher parted on amicable terms on Monday when they discussed the issues.

"Charles and David had a pint, and Charles wished David good luck," the source said. This, however, could not be confirmed because Abbey is not elaborating on its statement of Tuesday. Mr D'Alton is understood to have purchased land at Lucan with planning permission for 310 houses. He was negotiating the purchase of the land last year on behalf of Abbey.

However, industry sources said Mr Gallagher decided not to proceed with the deal and asked for the negotiations to cease. At the time the land had 474 plots but subsequently a company purchased 164 plots and sold off 82 of these to Abbey. The Abbey spokeswoman reiterated that she could not comment pending a completion of the investigation.

The industry sources said Mr D'Alton considered the Lucan land was an attractive proposition. And when Abbey decided not to proceed, he investigated the possibility of doing the deal himself. The value of the purchase is thought to be in excess of £10 million.

Abbey has more than 1,000 plots available for its Irish operations. Earlier this year, Mr Gallagher said the company could build around 350 houses in 2000.