John Hemming has quit as chairman of the Birmingham Strategic Partnership after losing a confidence vote.
Board members voted 7-3 against the Liberal Democrat MP for Yardley continuing to chair the BSP, a body which brings together influential public and private sector executives.
His decision to stand down brings to a close months of behind the scenes rows which, according to Mr Hemming, involved pressure for him to go from the Government Office for the West Midlands.
He will be replaced as BSP chairman by Paul Tilsley, the deputy leader of Birmingham City Council.
BSP members who voted against Mr Hemming included representatives from the Birmingham Chamber of Commerce and Industry, the Learning and Skills Council and Birmingham University.
They argued that the duties of the BSP were such that the chairmanship should be held by either the leader or the deputy leader of the council.
Mr Hemming, however, believes the real reason for his removal lay in his "outspoken nature".
He forced the BSP to meet in public, a decision viewed with suspicion by some board members.
Mr Hemming said there had been "implicit threats" from Government and funding agencies that Birmingham could lose millions of pounds in grant aid if he remained BSP chairman.
He added: "I am aware that I have put some people's noses out of joint. I have driven what used to be secretive, private meetings into the public domain and opened up the BSP to having wider representation.
"I am aware that this has not made me popular.
"There has been substantial resistance from a few of the publicly funded organisations and from the Government Office for the West Midlands to the way in which I have changed matters."