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The principal of Bretton Hall College, which is under investigation for financial irregularities, is to leave his post next month.

A spokesman for the college said that Gordon Bell had stepped down to facilitate the merger with Leeds University in 2001. David Sugden, pro vice-chancellor at Leeds, will become acting principal from August 14.

The university said it remained committed to the merger, that investigations were proceeding well and that remaining difficulties could be resolved.

It emerged last week that the college's finance director, Daniel Stone, has been suspended pending an investigation by the Higher Education Funding Council into European Social Fund activities.