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The former Bartle Bogle Hegarty deputy chairman left abruptly at the end of last week as a result of what insiders say were his problems at

getting to grips with the management and leadership of the agency and in establishing a rapport with senior staffers.

His departure brings a sudden end to his partnership with Tim Mellors,

who adds the chairmanship to his role as chief creative officer and

managing partner of the agency, which claims billings of pounds 395

million.

Smith is on 'gardening leave' and under instruction not to talk about

his exit - claimed in an agency statement to be for 'personal reasons' -

while his severance terms are being resolved.

In the statement, Smith, who was in hospital last month for a neck

operation, said he had been told to 'take a short time out' after his

surgery but added: 'I intend to be back in the flow of things soon.'

The split culminates what is said to have been a less than happy period

for Smith, who was hired in the hope that he could bring his experience

at helping to run a creatively led shop such as BBH to Grey. The agency

was looking to broaden a client base that is dominated by conservative

multinationals such as Mars, Procter & Gamble and Glaxo SmithKline.

In January, Steve Richards, regarded as one of the London agency's most astute financial operators, was promoted to managing director to provide Smith with extra support.

However, it is believed that Grey chiefs realised the situation had

become untenable. Smith left the agency last Friday after a meeting with

Carolyn Carter, president of Grey Worldwide Europe, the Middle East and

Africa, and John Shannon, president of Grey International.

'It was thought better to act now than let matters drift on,' an agency

source said.

Privately, senior managers acknowledge that they may have been too hasty in headhunting a new chief executive to replace Steve Blamer, recalled to his native US a year earlier than expected to take charge of the network's flagship New York office.

They also believe the cultural chasm separating BBH and Grey was too

wide for Smith, who was unable to establish a successful working

partnership with Mellors. 'It was a disappointing outcome for both

parties,' Mellors said.

The agency is not expected to name an immediate replacement for Smith with both external and internal candidates likely to be in contention.

'We'll take our time and explore a number of options,' a senior source

said.