Sir Alan Sugar is to step down from any day-to-day involvement in his business empire before he takes up his role as Gordon Brown’s ‘Enterprise Tsar’.
Sugar has been at the centre of an escalating row over his appointment as the government's "Enterprise Tsar" with critics citing potential conflicts of interest with his role in his businesses and as the star of the BBC's The Apprentice.
The Amstrad founder was appointed by Gordon Brown last week, but the move was attacked by the Conservatives, who argued that the job was "completely incompatible" with presenting the hit BBC show.
Sugar will also be taking up a peerage and will sit on the Labour benches in the House of Lords and vote with the government.
Yesterday, the shadow culture secretary Jeremy Hunt wrote to Mark Thompson, the director general of the BBC, to ask if the show would be scrapped if it clashed with a General Election next year.
"Sir Alan is a celebrity thanks to his funding from the licence fee. He is using the licence fee money to represent the Government's message. I think his new role is completely incompatible with presenting The Apprentice."
A spokesman for Sugar said that he would be handing over the day-to-day running of his companies. While he has already sold his stakes in Amstrad and Tottenham Hotspur Football Club, he retains control of £270m property portfolio Amshold and is chairman of computer firm Viglen.
Last month, Viglen won a £30m contract to supply government departments with 70,000 computers.
Claude Littner, the former chief executive of Tottenham Football Club, will now run Amshold but Sugar will stay as chairman of Viglen, saying he had little direct involvement in the computer company.
The BBC said that it was in discussions with Sugar about ensuring no editorial guidelines would be broken, but his decision to step back from his private businesses may not be enough to quell criticisms about potential conflicts between the Enterprise Tsar role and The Apprentice.
Business leaders have given a mixed response to Sugar’s appointment. John Wright, chairman for the Federation of Small Businesses (FSB), said:"The appointment of enterprise champion Sir Alan, with his stature and no-nonsense approach, should help compel the banks to lend fairly to viable small firms.
“We look forward to working with Sir Alan to help him break down the barriers which have made it so hard for viable new and existing businesses to gain vital loans and overdrafts to help them survive and grow.”
However, many entrepreneurs have greeted the appointment with cynicism, including Charlie Mullins, founder of Pimlico Plumbers.
"Sir Alan Sugar has a proven track record in business, which is beyond criticism. But making him Enterprise Tsar is nothing short of window dressing by a desperate Gordon Brown. The writing's on the wall for all to see," he said.
© Crimson Business 2009