The chairman of the Post Office has stepped down amid ongoing tensions in the wake of the Horizon IT scandal.

Henry Staunton will depart from the role following a phone call with Business Secretary Kemi Badenoch on Saturday.

Ms Badenoch said she “felt there was a need for new leadership” as the company remains under heightened scrutiny over the wrongful prosecution of hundreds of subpostmasters.

An interim will be appointed “shortly”, the Department for Business and Trade said.

Mr Staunton only took up the post at the state-owned business in December 2022, following nine years as chairman of WH Smith.

Kemi Badenoch visits Istanbul
Business Secretary Kemi Badenoch (Aaron Chown/PA)

He had been tasked with leading the board of directors as the business reels from the fallout of what has been described as the UK’s biggest miscarriage of justice.

More than 700 branch managers were prosecuted by the Post Office between 1999 and 2015 after faulty Horizon accounting software made it look as though money was missing from their shops.

Hundreds of subpostmasters and subpostmistresses are still awaiting compensation despite the Government announcing that those who have had convictions quashed are eligible for £600,000 payouts.

Mr Staunton’s departure follows frustration in Whitehall over the company’s governance, including a row over the prospective appointment of a new senior independent director, Sky News reported.

Insiders told the outlet his exit was not directly related to the Horizon scandal itself, but that there had been differences of opinion between him and Government as to the best candidate for the job.

It comes at one of the most turbulent points in the company’s history, with a statutory inquiry into the saga under way and renewed public anger following its dramatisation in ITV’s Mr Bates Vs the Post Office earlier this month.

Prime Minister Rishi Sunak has also announced blanket legislation to exonerate those wrongly prosecuted after the TV series returned the scandal to the spotlight.

A Government spokesperson said: “In a phone call earlier today, the Secretary of State for Business and Trade and Henry Staunton, chair of Post Office Limited (POL), agreed to part ways with mutual consent.

“An interim will be appointed shortly and a recruitment process for a new chair will be launched in due course, in accordance with the Governance Code for Public Appointments.”

The Post Office has been contacted for comment.