Capita executive chairman Rod Aldridge has stepped down following the row over a £1m loan he made to the Labour Party.

He will remain as non-executive chairman until the time of the company’s interim results in July, when he will retire from the board.

Aldridge has led the company since its foundation in 1984.

He said: “At present, the group’s reputation is being questioned because of my personal decision to lend money to the Labour Party.

"As I have made clear, this was entirely my own decision as an individual, made in good faith as a long standing supporter of the party.

“There have been suggestions that this loan has resulted in the group being awarded Government contracts. This is entirely spurious.

"Whilst anyone who is associated with the public procurement process would understand that this view has no credibility, I do not want this misconception to continue, as I remain passionate about the group’s wellbeing.”

Apart from its major outsourcing interests, Capita has recruitment businesses such as Capita Resourcing, Veredus Executive Resources and Capita Education.