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Cash-strapped Dyfed Powys health authority and its chief executive Peter Stansbie are to part company, a decision reached by 'mutual agreement'.

An HA statement announcing the move said: 'The two parties have agreed that it is in the best interests of Mr Stansbie and the future of the health service in the area that someone new takes forward the challenging agenda faced at present.'

In the HA statement, Mr Stansbie admitted that his time at Dyfed Powys 'has been difficult'.

He presided over seemingly intractable financial problems at the most indebted HA in Wales. In the current financial year it is having to borrow£12.7m from the Welsh Assembly to break even.

Mr Stansbie leaves after months of press coverage about the financial crisis, and his departure would create 'a more stable environment', the HA said.

Mr Stansbie has been in the hot seat at Dyfed Powys HA for four years and a health service manager for over 27 years. He is a former president of the Institute of Health Services Management.

According to the HA he is 'looking forward to returning to the service in a different guise as soon as possible'.

A senior source said Mr Stansbie, while controversial, had been unfairly forced out.

'He did have a clear idea of what had to happen. I think the politicians gave him an impossible agenda - they wanted him to balance the books but not to make a noise. It was the politicians that did for him.'

Mr Stansbie was not available for further comment.