Since last year’s flotation of PartyGaming shares on the London Stock Exchange, Mr Segal had been commuting to PartyGaming’s headquarters in Gibraltar on a weekly basis.

A statement released by the company on Tuesday said that, given the rapid growth of the Company, both Mr Segal and the Board have agreed that the CEO now needs to be located in Gibraltar along with all of the other executive directors.

However, Mr Segal has strong ties in London and is reluctant to uproot his family.

"Following discussions with his family, Richard has declined a request by the Board to move to Gibraltar and will therefore be leaving the Company," the statement explained.

Mr Segal joined PartyGaming in August 2004 following a highly successful 16-year career in the leisure industry with Rank, which culminated in him leading the buy-out and subsequent sale of Odeon Cinemas.

The PartyGaming statement also credited Mr Segal with playing an "instrumental" part in the company's rapid growth in recent times.

Under his leadership, PartyGaming saw its revenues grow to $977.7 million in 2005, up from $602 million in 2004. He was also at the helm during several significant developments in the company's history, including its highly-publicised flotation on the LSE last year - at the time the largest IPO to date on the exchange.

Mr Segal explained that the decision to leave the firm had been "very difficult".

“My time at PartyGaming has been one of enormous challenge and great excitement and we have achieved a huge amount in a very short space of time," he noted.

Michael Jackson, the company's non-executive Chairman, added that: “PartyGaming’s IPO and subsequent success has been due in large part to the leadership of Richard Segal, the Group’s CEO. It is therefore with regret that we are announcing Richard’s departure. On behalf of all stakeholders we thank him for his substantial contribution and wish him every success for the future.”

The news that Mr Segal would be parting company with the firm coincided with the release of its preliminary results for the year which ended on December 31, 2005, which saw revenues climb by 63%, up from $601.6 million in 2004. The results were described by Mr Jackson as "outstanding."