Mr Paddy Teahon has resigned as executive chairman of Digital Media District Limited (DMDL), the company formed to develop the €250 million Digital Hub redevelopment project in Dublin.
It emerged last night that two months ago Mr Teahon joined the board of a property firm - Insignia Richard Ellis Gunne - which was contracted by the Office of Public Works in 2000/2001 to undertake consultancy work for the purchase of the land in the Liberties area of Dublin that will be used for the Digital Hub.
Mr Teahon was not available for comment but a spokeswoman for Digital Media Development Limited said Insignia Richard Ellis Gunne had informed the Office of Public Works that it had invited Mr Teahon on to the board. The firm had subsequently agreed to withdraw from advising the OPW on this project.
Earlier this week, 12 firms submitted pre-qualification expressions of interest to develop the Digital Hub project. It is understood Insignia Richard Ellis Gunne did not take part in this process. Treasury Holdings - another property company of which Mr Teahon is a director - did not participate, either.
The DMDL spokeswoman said Mr Teahon's resignation was in line with decisions earlier this year to split the executive chairman's role into two positions: a chairman and a chief executive.
It is understood that as recently as July, members of the Digital Hub board were unaware that Mr Teahon - a former secretary general at the Department of the Taoiseach - would step down from the board rather than move into the position of non-executive chairman.
Senior sources say the relationship between some board members and Mr Teahon was "uncomfortable".
It is understood that senior government figures were aware of Mr Teahon's appointment to Insignia Richard Ellis Gunne.
The new chairman of DMDL is senior information technology industry figure Mr William Burgess, who is retiring from his positions as chairman and managing director of IBM Ireland.
According to senior sources close to the project, Mr Burgess is considered an ideal appointment, given his IT background and experience of developing IBM's large Dublin "campus", which employs more than 4,000 people.
The Minister for the Department of Communications, Marine and Natural Resources, Mr Dermot Ahern, whose department oversees the hub project, said in a statement: "I want to thank Mr Teahon for his enthusiasm, drive and hard work in bringing the project to this stage of development."
Mr Teahon resigned earlier this year from Campus & Stadium Ireland, the body charged with developing the troubled national stadium.
His resignation followed a controversy over the awarding of a contract for construction of the National Aquatic Centre to a shelf company.