The decision to allow Association of Colleges' chief executive Roger Ward to resign with three months' pay will inflame many college principals who expected him to be sacked.
Mr Ward was given the option to go gracefully or be sacked, following revelations in The TES. But even three months' pay-off flies in the face of the association's own advice to colleges over the action to take if officials commit disciplinary offences.
The association's guidelines state clearly that an offender should be dismissed with no cash compensation.
More than 100 principals have been waiting in the wings, prepared to call an emergency general meeting to demand Mr Ward's dismissal and move a vote of no confidence in the AOC board. They were concerned that the lack of activity by the board, and the lengthening period of drift since the revelations last November, was becoming extremely damaging.
Howard Phelps, the chair of the association, told the board he wanted to relinquish the post. Jim Scrimshaw, chair of governors at Barking College and a critic of Mr Ward, has succeeded him.
The board established an inquiry after The TES revealed that Mr Ward was paid pound;650 a month in a consultancy agreement with Burke Ford Reed, a company which supplies healthcare policies to the further education sector. Mr Ward denied there was an agreement, even though The TES produced the letter setting out how payments were to be made to his bank.
The board asked Newcastle-based solicitors McKeag and Co to undertake the inquiry. Burke Ford Reed refused to help in the investigation, citing client confidentiality.
The solicitors gave an interim report to the board this week. The AOC was advised that it could sack Mr Ward or invite him to resign. It took the latter option.
Last month, Mr Ward was hauled back before the Commons Education and Select Committee and asked why he had claimed that the AOC held a full register of interests when no such document existed. Three senior staff had written to the committee to say that it had been misled.
Mr Ward said he had not expected so many detailed questions about codes and registers, and had got a number of points wrong. He said he had been referring to his own private note.
Yet The TES further discovered that last October Mr Ward wrote to all board members commenting on reports in Private Eye. He wrote that all the relevant points referred to in that magazine had been recorded in "our" register of interests.
This week, The TES put the following questions to the Association of Colleges: * "Did any board members query the existence of the register referred to by Mr Ward's letter at the time?
* "Did any board members raise any questions regarding the register of interests after Mr Ward sent the letter?
* "Given that the letter refers to 'our' register of interests, why was the Select Committee not told that such a register did not exist until three senior AOC staff members raised concerns?
* "Is the board happy with Mr Ward's explanation of the register issue, made at his second appearance at the Select Committee?" There has been no reply so far.
One principal told The TES: "I am utterly appalled that Roger has got any kind of pay-off. There are also serious question-marks about the way the board has handled this matter, and we must move on from questioning the judgment of one man, to look at the wider issues of competence of the people now leading the colleges."
Mr Ward was unavailable for comment.