The BBC's Paul Newman reports on "an unprecedented internal crisis" for the FA

It follows the sudden resignation of Graham Kelly and a vote of no confidence in chairman Keith Wiseman.

The controversy, which surrounds reports of a £3.2m loan to the Welsh FA, has left the World Cup campaign in turmoil.

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Mr Kelly, the chief executive for the past 10 years, quit after a six-hour crisis meeting at the Lancaster Gate headquarters in London.

Mr Wiseman refused to go despite the unanimous vote of no confidence of the FA's executive committee.

The executive will hold a special council of FA members early next month to ask for their backing.

'Head held high'

As Mr Kelly left the FA headquarters for the last time he told reporters he had done nothing wrong and was leaving "through the front door" with his head held high.

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His departure comes in the wake of allegations - made by a Sunday newspaper last month - that he approved a £3.2m loan to the Football Association of Wales without checking with colleagues.

The loan was allegedly promised by Mr Wiseman shortly before the Welsh FA supported his nomination as a Vice President of Fifa, the sport's international ruling body which ultimately decides where the World Cup is staged.

It is believed the only members of the FA executive who knew about the loan were Mr Wiseman and Mr Kelly.

The head of the government's Football Task Force, David Mellor, said the FA was "amateurish" and he said it was time for the "old men in blue blazers" who have run the sport for decades to go.

Mr Davies said Mr Wiseman had been informed of the vote by FA vice-chairman Geoff Thompson.

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Mr Davies said: "There was a unanimous vote of no confidence in the chairman. He has declined to resign.

"The executive will seek endorsement for their actions at a special FA council meeting in early January.

"This vote of no confidence was taken unanimously by all sections of the game.

Davies reads a statement from Keith Wiseman

"It was not part of a personal campaign...this has been painful for all those involved in taking the decision."

He rejected suggestions that the resignation would damage England's chances of hosting the 2006 World Cup finals.

Mr Davies and Mr Thompson have been handed provisional control of the FA's affairs at its Lancaster Gate headquarters in London.

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In a later statement issued through Mr Davies, Mr Wiseman said: "The issue is one for the full Football Association Council.

"I do not intend to make any comment at all until I have shared the full circumstances of this matter with them all - save that the version of events carried hitherto in the national press is a gross distortion of the truth."

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BBC Sports presenter Rob Bonnett, in a report for BBC News Online, comments that the FA's credibility in launching a bid for the 2006 World Cup would now appear to be in tatters.

According to a report in a Sunday newspaper, Mr Wiseman pledged a £3.2m grant to the hard-up Football Association of Wales, spread over eight years.

But the chairman rejected the reports, saying that such loans are "commonplace" and that there was "nothing wrong or unusual" about providing financial help to the FAW.

But the FAW has defended the loan and Mr Wiseman, saying: "All that money was to go to charity to help promote our youth and women's football in Wales.

"There was nothing sinister in it."