Days after he declared he was “in love” with Plymouth Argyle, Ian Holloway has dumped the club in favour of a richer suitor. Holloway resigned as manager of the Coca-Cola Championship side yesterday and will take over at Leicester City once the clubs have agreed compensation.

Holloway held a meeting with Paul Stapleton, the Plymouth chairman, on Tuesday and was refused permission to talk to Leicester, which prompted his resignation. The 44-year-old is in limbo until tomorrow, when the Plymouth board will consider how to react to his decision.

What could be an acrimonious wrangle over compensation makes it debatable whether Holloway will be in place at the Walkers Stadium before Saturday’s trip to Bristol City. Leicester are seventeenth in the Championship, while Plymouth are seventh, but Holloway is expected to double his wages to about £500,000 a year. He will also be given substantial transfer funds by Milan Mandaric, the Leicester chairman.

Holloway was interviewed for the managerial position at Leicester in February 2006, when he was at Queens Park Rangers, after which the London club placed him on gardening leave. He took charge of Plymouth in June that year and led the Devon club to eleventh place in the league and the quarter-finals of the FA Cup. He spent £1.1 million on players but is believed to have become frustrated that he was not given more money to turn Plymouth into genuine promotion contenders. Holloway is halfway through a three-year contract. He will be Leicester’s fifth manager of 2007. Gary Megson resigned last month to take charge of Bolton Wanderers.

Candidates to replace Holloway include Steve Cotterill, who left Burnley this month, and Paul Sturrock. Now manager of Swindon Town, the Scot took Plymouth out of the bottom division in 2002 before leaving for a brief spell in charge of Southampton.

Holloway was due to be at Plymouth’s club shop tonight promoting his autobiography, in which he describes the side as “like a mini-Man United” that he wants to take to “its rightful place in the Premiership”. That rings rather hollow now, particularly as the denials that he was about to quit Plymouth were so strong.

As recently as Monday, Stapleton insisted that there was “no truth” in the story, while last week, Holloway dismissed a report suggesting he was disillusioned and contemplating leaving. “Anyone who takes that seriously ought to commit themselves to an asylum . . . it’s all poppycock . . . it’s absolute rubbish,” he said, adding that there was “not a scrap of truth” in rumours that he was a Leicester target.

Then again, if Holloway was taking his cue from Mandaric, that line was understandable. “Ian Holloway will not be the next manager of Leicester,” Mandaric said last week.