Gavin O'Reilly's resignation ends almost 40 years of family involvement in IN&M. (File pic)

Enda Kenny said the government will consider “cross-ownership” of the media after an escalation in the battle for control of one of Ireland’s largest news organisations.

His comments came after Gavin O’Reilly, chief executive of Independent News & Media, quit following the boardroom struggle with billionaire telecoms and broadcasting magnate Denis O’Brien.

The company will now move on without an O’Reilly at the helm for the first time in the 40 years since Sir Tony O’Reilly bought the group.

The Taoiseach arrived for an event in Belfast shortly after details of the changes were announced.

“I have just heard the news on the way up,” he told reporters.

“Clearly this is a matter that obviously has been brewing for some time.

“I don’t know all of the details yet, but government in its own way will have a reflection on this in terms of cross-ownership of media.”

Mr O’Reilly said he was pursuing new opportunities after 19 eventful years with the company.

“It had become clear that recent and public shareholder tensions were proving an unnecessary distraction for both me and the company and this was not in the best interests of the company,” he said.

His resignation was described as a compromise agreement aimed at creating a board, management team and shareholders who are unified and aligned for immediate challenges and opportunities.

“I leave this great company with mixed emotions, and I want to particularly thank my work colleagues and friends across Australasia, Ireland, South Africa and the UK, who I have had the great honour and privilege to work alongside,” he said.

Shares in the company have fallen about 60 per cent in the last year. They closed in trading at 24p.

Vincent Crowley, a chartered accountant by profession, has been appointed chief executive.

James Osborne, INM chairman, said he has the unanimous support of the board.

“He has served the company with distinction for over 20 years. I believe he is well equipped to position the group for the challenges which continue to face the media industry,” Mr Osborne said.

Mr Crowley joined INM from KPMG in 1990 and has served as group chief operating officer and the chief executive of INM Ireland.

INM has a revenue of about €558 million worldwide and employs about 2,900 people with its main interests in the Irish Republic, Northern Ireland, and South Africa.

The dramatic resignation at an afternoon board meeting comes after intense pressure and speculation that Mr O’Brien – the largest shareholder with 22 per cent of the business – would try to force him out at the AGM in June.

Mr O’Reilly led the company for the last three years after a turbulent financial restructuring.

The family’s control was first diminished when Sir Tony O’Reilly’s stake was cut to 14 per cent by lenders swapping debt for equity.

Mr O’Brien has become more and more aggressive over the last two years with much media comment over his supposed bid to take over the group.

He already holds significant radio interests through several Dublin-based stations including Newstalk and 98FM.

It is understood the crucial tipping point for a takeover would be a 35 per cent stake.

Last week businessman Leslie Buckley, a former representative of Mr O’Brien on the INM board until he was ousted a year ago, declared INM needed new leadership.

He also raised questions about what the company was doing about a €147 million pension deficit.

That followed a withering attack by Mr O’Brien against the Sunday Independent over its reporting of him and his appearances with government ministers, including Taoiseach Enda Kenny during a visit to the New York stock exchange.

Mr O’Brien was found by the Moriarty tribunal to have secured the winning of a competition for a hugely lucrative mobile phone licence in Ireland thanks to former minister for communications Michael Lowry.

The long-running inquiry, which reported last year, found Mr O’Brien made two payments of about IR£500,000 to Mr Lowry, in 1996 and 1999.

He was also found to have supported a loan of £420,000 for Mr Lowry in 1999.

No findings of corruption were made and Mr O’Brien has rejected the tribunal’s conclusions.

A spokesman for Mr O’Brien has said the reporting in the Sunday Independent, Ireland’s best-selling Sunday paper, was “one of the most concerted and biased campaigns ever waged against any individual in this country”.

Mr O’Brien’s aide wrote to Michael Denieffe, managing editor of INM, to complain and also issued the letter to the media.