The announcement just before 7pm tonight followed lengthy talks between the 57-year-old and the board.

Keegan, who only returned to the St James's Park in January for a second spell as manager, issued a statement which said: "I've been working desperately hard to find a way forward with the directors, but sadly that has not proved possible.

"It's my opinion that a manager must have the right to manage, and that clubs should not impose upon any manager any player that he does not want."

Keegan led the Magpies to safety last season, and the club had made a solid start to the new campaign - but Keegan became increasingly unhappy with the club's management structure.

He was particularly concerned at executive director of football Dennis Wise's role.

Winger James Milner was sold to Aston Villa for £12m last week, just days after Keegan said there was "no way" he would be leaving.

It is believed he was also incensed at deadline-day attempts to offload star striker Michael Owen, and bad-boy midfielder Joey Barton, who Keegan has backed throughout his off-field problems.

Two new players were signed on Monday - Spanish striker Xisco from Deportivo la Coruna, and midfielder Nacho Gonzalez on a season-long loan from Valencia - but it is understood Keegan had no part in their recruitment.

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