Keegan, who had already seen James Milner sold to Aston Villa against his wishes, felt his position had become untenable.

The 57-year-old learnt that executive director (football) Dennis Wise was trying to do a deal with Tottenham Hotspur for Owen – who he was desperate to keep at St James's Park – as late as 10pm on Monday night.

Keegan had little knowledge of the club's two final signings – Xisco and Nacho Gonzales – and only identified himself one summer capture, Danny Guthrie.

And the one position above all others he wanted to strengthen above all others – left-back – remained unfilled when the midnight deadline passed.

Tellingly, the club made a net profit of around £1.5m on transfer deadlings this summer if the payments made on previous transfers from the Freddy Shepherd era are discounted.

Early this week Keegan gave owner Mike Ashley and managing director Derek Llambias a choice between Wise and himself, but the billionaire was not willing to dismantle the structure he had put in place to oversee player recruitment in January.

Last night Keegan – through the League Managers' Association – revealed he had resigned.

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

United responded saying it was "sad and disappointed" he had left, and adding it "regretted" Keegan had not dicussed further a set of proposals for a way forward.

These suggestions, however, are not understood to have involved marginalising Wise and his team of Tony Jimenez and Jeff Vetere.

Things could get worse for Keegan, with one report this morning claiming the club will now pursue him for £2m in damages for walking away from the job.

Keegan's assistant Terry McDermott – who has worked with four different Newcastle managers – is now waiting to learn his fate along with other backroom staff.

However, assistant Chris Hughton, a Wise appointment, looks set to stay at St James's Park, and will most likely be put in charge of team affairs until a successor is in place.