THE London Stock Exchange (LSE) yesterday ousted its chief executive, Mr Michael Lawrence, due to "loss of confidence". The City was shocked.

"Following a board meeting today, the Stock Exchange announces that its board, having lost confidence in its chief executive, Mr Michael Lawrence, has required his resignation with immediate effect," the LSE said.

It said that, pending the appointment of a new chief executive, the chairman, Mr John Kemp Welch, would chair the executive committee, which is charged with the day to day management of the exchange. Mr Ian Plenderleith, an executive director of the Bank of England and a member of the stock exchange board, would join Mr Ian Salter as a deputy chairman.

Speaking at a packed and hastily organised press conference, Mr Kemp Welch told reporters there had been "no single episode" which had led to the board's decision to force Mr Lawrence to step down, but an accumulation of factors had combined to make his position untenable.

"While Mr Lawrence's departure reflects the loss of confidence in him by the board, it does not imply any change in the Stock Exchange's policy. Our objective is to be the market of choice," Mr Kemp Welch said.

Mr Lawrence is the second chief executive of the exchange to be forced to quit his post, following Mr Peter Rawlins who left in March 1993 after the embarrassing and costly failure of the LSE's TAURUS electronic share settlement system.

"It's with much regret the board felt compelled to ask for Lawrence's resignation," Mr Kemp Welch said. "However he had failed to win the confidence of market firms, both large and small and his relationship with the stock exchange board had for several months been unsatisfactory."

On November 30th the board had decided to continue the implementation of a new, fully electronic trading and order matching system it has been developing since 1993. But a number of major stock exchange firms have expressed strong reservations over whether to fully implement the system.

Mr Lawrence had led the exchange's drive to implement a bold new strategic direction since he joined as chief executive in February 1994, and had promoted and hired a team of rising young executives to direct its strategy.

Mr Kemp Welch, who had been a senior partner at the London brokerage Cazanove, joined the exchange as chairman five months after Mr Lawrence. He said there was much yet to do at the exchange and that its policies have already been laid out.

The exchange had made significant policy towards meeting these objectives, he added.