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The joint managing directors, Neil Henderson and Phil Teer, have won the battle to lead the agency after a bitter row erupted last month .

The rift centred on divided opinion about opening an overseas office and Law's involvement in the creative media company Artist Network.

The resignations have come following a series of discussions by the St Luke's board made up of Law, Stanners, Henderson, Teer, the finance director, Neil Thompson, and Al Young, the executive creative director.

Law said: "Although I founded St Luke's, I don't own it. I'm a shareholder like everyone else and it was always meant to survive beyond me. I feel like a dad whose kids have just gone to university."

Henderson said: "Andy spent most of his time doing international consulting and writing his book, so Phil and I have been running the company since last April."

St Luke's was set up in 1995 using a cooperative structure, which Henderson defended: "Our model has been spectacularly robust and a lot of it is conventional. We have a board and they make decisions which are legally binding."

Despite all members of the agency being allowed to have input in key agency business decisions, the departure of Stanners and Law was thrashed out at board level.

The agency hasn't scrapped plans to open other St Luke's offices, but Henderson intends to adopt a more conservative approach than Law.

"We have agencies in India and Sweden and it is true that Andy had more involvement in them than us. But international expansion is still a very important part of our future. However, we want to grow strategically and look carefully where to go next."

Last April, the agency promoted Henderson, then the client services director, and Teer, the planning director, to joint managing director status in a move designed to free up Law so he could pursue other projects.

Law proceeded to team up with the ex-Eurythmics star Dave Stewart and other partners including the founders of the Body Shop, Anita and Gordon Roddick, and Endemol's Malcolm Gerrie, to launch Artist Network.

Earlier this year, the venture had to close the Islington music venue it had revived, The Marquee Club, following financial difficulties. This freed up Law's attention, which he then refocused on St Luke's, causing friction with the agency's management.

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