Optare Holdings Ltd was taken over by Jamesstan Investments Ltd, a company controlled by North East businessman Roy Stanley.

A statement from the firm said that since Jamesstan's acquisition, a restructuring had taken place and the position of managing director of Optare Holdings Ltd had been made redundant.

"A mutually amicable agreement has now been reached with Bob Coombes who wishes to express his appreciation to all his staff and colleagues at Optare for the support he received during his five years as managing director," the statement said.

It continued: "The company wishes Bob every success in his future career and sincerely thanks him for his significant contribution to the advancement of Optare as a leading manufacturer within the European bus and coach industry."

Optare employs around 550 staff and has a turnover of around £60m. It is best known for supplying buses to Stagecoach, Go-Ahead and First Group.

The company is developing hybrid diesel electric buses which do less harm to the environment.

Rejected

The firm is looking to move from its HQ in Cross Gates to a new location in West Yorkshire, and Leeds City Council has previously rejected a planning application to build nearly 300 homes on the site. Optare also has a manufacturing plant in Rotherham.

At the time of the deal announcement, the firm said Mr Coombes and the rest of the management team would remain with the business.

Optare's chairman Russell Richardson joined Mr Stanley on the board of Jamesstan as a non-executive director following the deal.

Optare was formed in 1985 by staff from the former Charles H Roe company, which had been closed by its owners British Leyland the previous year.

The Roe company had been based on the Leeds site since 1923.

Mr Stanley, from Washington, Tyne and Wear, is also chairman of the Tanfield Group, which is listed on the Alternative Investment Market.