BOB KILEY, the London transport commissioner, has been forced to retire early after clashing with one of his directors.

Ken Livingstone, the Mayor of London, decided to replace him after facing losing either Mr Kiley or Jay Walder, the finance director of Transport for London.

Mr Kiley, Britain’s highest-paid public servant, with a salary and bonus package worth £600,000 a year, will step down at the end of January. He will have to leave his £2 million home in Belgravia, which was bought for him when he was recruited by Mr Livingstone five years ago.

The Mayor made the announcement while Mr Kiley was away in America celebrating Thanksgiving with his family.

Mr Kiley, 70, had been due to remain in post until the end of 2008. But a series of disputes between him and Mr Walder over staffing and policy culminated recently in a row in which it became clear that one of them would have to go.

Mr Walder, a fellow American who had worked with Mr Kiley when he was in charge of the New York subway in the 1980s, is one of the leading candidates for the commissioner’s post. The other internal candidates are Tim O’Toole, the American boss of London Underground, and Peter Hendy, TfL’s director of roads and buses.

Mr Kiley was praised last night by passenger groups for his contribution towards improving transport in London. He helped to introduce the congestion charge and invested heavily in the bus network, increasing bus passenger numbers by a third, or almost two million a day. Mr Kiley also secured £10 billion of funding for investment in new infrastructure, including the Thames Gateway Bridge and extensions of the Docklands Light Railway. But he failed in two High Court bids to halt the part privatisation of London Underground.

Mr Walder is understood to have spoken to Mr Livingstone after one of the recent disputes with Mr Kiley. The Mayor made it clear that he was keen to keep Mr Walder because of his greater financial expertise and grasp of detail.

Mr Kiley’s departure is embarrassing for Mr Livingstone, who had repeatedly been forced to defend his commissioner’s record pay package.

The official reason given for Mr Kiley’s departure was that London needed a transport leader who would still be in post by the time of the Olympic Games. Mr Livingstone said: “The positive impact of Bob’s transport legacy will be felt by Londoners for many years to come. The next commissioner of Transport for London will take the city through to the 2012 Olympic Games.

“It has been a great personal pleasure to work with Bob, whom I consider to be one of the outstanding public servants I have encountered.”

Roger Evans, Conservative transport spokesman on the London Assembly, said: “We always had serious concerns about Bob Kiley’s value for money. Ken Livingstone personally brought Bob Kiley to London, showering him with praise. How did relations sour so much that Ken’s golden boy has failed?” Brian Cooke, chairman of London TravelWatch, said: “Bob was a good thing for all in London who use public transport.”

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• He stole my son, now I’m alone in hell
• Back on the air, but don’t mention Mugabe
• Ten kitchen gadget gift ideas