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Smith, 37 and four months pregnant, is going back to her native Melbourne and may return to the communications business in Australia after the birth of her second child.

She will end her association with W&K in December, after a three-year stint. During that time, she oversaw its transformation from an agency dogged by management upheaval and failure to make an impact on the UK ad scene to a potent creative operation that produced the highly acclaimed "cog" ad for Honda's Accord.

Smith said that her plan to return home with her South African engineer husband was "a life decision rather than a career one".

She said: "The job at W&K is done in terms of turning the agency around financially and creatively and getting the right kind of clients. The next stage is for the agency to decide what it wants to be, now that it has grown up."

Dan Wieden, W&K's chief, and Dave Luhr, its chief operating officer, are due to arrive in the UK next week from the network's Portland, US headquarters to begin the search for a successor.

One candidate to take over from Smith could be the agency's new-business director, Camilla Harrison, who became the caretaker managing director while Smith was on maternity leave last year.

W&K had a nightmare debut when it launched in the UK in 1998. Mike Perry, the then managing director, left after less than a year, as did his successor, Hugh Derrick.

Senior creatives, including the former Saatchi & Saatchi creative chief Adam Keane, resigned in rapid succession.

Onlookers blamed the high turnover on W&K's attempt at imposing an uncompromising US culture and there were reports that the London office would be closed.

Since her arrival from WCRS in July 2000, however, Smith succeeded in stablising and building the troubled shop in collaboration with the joint creative directors Tony Davidson and Kim Papworth.

Smith came to Britain from Australia in 1994, working first at the then Simons Palmer Denton Clemmow Johnson before a brief spell as the new- business director at McCann-Erickson. She joined WCRS as the agency's marketing director in 1997.

A one-time marketer at Telstra, the Australian telecoms giant, Smith said she didn't rule out returning either to an agency or a client company.

"Because the Australian market is small, people have to innovate and there's lots going on there," Smith said.

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