The Football Association bowed to the inevitable last night, sacking the England manager, Glenn Hoddle, for "a serious error of judgment" that had offended the disabled and stained the reputation of the national game.

Soon after the announcement, which came after a day of tortured negotiations between Hoddle and the FA, the England coach appeared before the cameras to apologise for the enormous upset that he had caused.

Looking drained he admitted causing "misunderstanding and pain to a number of people." He added: "This was never my intention and for this I apologise."

Hoddle maintained to the end that he was misrepresented by an interview in the London Times which suggested that he believed disabled people were paying for indiscretions committed in previous lives.

He refused to resign, and it is understood he rejected a life-line offered to him by the FA's acting chairman, Geoff Thompson.

He told Hoddle that he would have to sever all his ties with the faith healer Eileen Drewery to have any chance of saving his job. Hoddle refused and spent most of yesterday with his agent Dennis Roach securing an estimated £500,000 settlement.

David Davies, the FA's acting chief executive, announced the decision to dismiss Hoddle at 7.00 p.m. in the room at the Royal Lancashire Hotel where his appointment was announced two-and-a-half years ago. An hour later, Hoddle issued a brief statement at the same venue, the Royal Lancaster hotel in which he accepted that he had made "a serious error of judgment".

Howard Wilkinson, the FA's technical director and former Leeds boss has been put in charge of the England team for next week's friendly against France at Wembley.

Tony Blair, disability campaigners and a large section of sporting opinion had lined up against Hoddle after remarks he made to a reporter appeared in Saturday's Times. Hoddle said: "You and I have been physically given two hands and two legs and half decent brains. Some people have not been born like that for a reason. The karma is working from another lifetime." As he fought for his £350,000 job, he said the comments had been "misinterpreted" but admitted he had not been misquoted.

Backing from the FA was never more than lukewarm. Hoddle has been plagued by controversy - much of it connected with Drewery - since he took over as England boss following the Euro 96 tournament.

Negotiations over Hoddle's future began in earnest at 9.30 on Monday night when Hoddle and Davies met the FA's acting chairman, Geoff Thompson, in a suite at White's Hotel, close to the FA's headquarters in Lancaster Gate, West London. Hoddle insisted he would not resign for being "misrepresented", but accepted that his position was becoming untenable. Thompson, though sympathetic to Hoddle and his sincere remorse, warned him that the FA might not be able to resist the call for him to go and said his baffling attempt at explaining the farrago in a series of television interviews had not helped.

Thompson and Davies discussed their options again yesterday morning and reported to other members of the International Committee, the body which hired Hoddle. The committee of Sir Bert Millichip, former FA chairman, Doug Ellis, Aston Villa chairman and David Dein, the deputy chairman of Arsenal, agreed that Hoddle's crass handling of the interview, his refusal to accept he had done anything wrong, or their ultimatum, constituted reason enough to sack him.