Power struggle claims 'Observer' editor

The future independence of the world's oldest Sunday newspaper was thrown into doubt last night after The Observer's editor quit unexpectedly following a bitter falling-out with senior figures at the title's sister paper, The Guardian.

Roger Alton, 59, had run The Observer for almost a decade and transformed its fortunes, winning the newspaper of the year trophy at the British Press Awards earlier this year.

In the latest figures from the Audit Bureau of Circulations, The Observer performed better than any other quality newspaper with a sale of 472,252 – up by 6.7 per cent on the previous month and 3.1 per cent year-on-year.

Last night Mr Alton, who was twice named editor of the year, summoned staff by email to his office for celebratory champagne and then told them he was leaving. In a five-minute speech, he outlined the paper's recent achievements and then finished by saying: "It has been an immense privilege to edit The Observer and work with such a brilliant team."

It was a far cry from the evening at the Grosvenor House Hotel in March, when Mr Alton told senior newspaper industry figures he was "unbelievably flattered and thrilled" to accept the prize for newspaper of the year, following a radical redesign of his paper which many commentators thought was far better than an earlier re-launch by The Guardian.

Even The Observer's bitter rival, The Sunday Times, conceded that Mr Alton was "widely seen as having produced a better paper with the new format" and quoted a pundit who said: "The Guardian is boring and already tired-looking, whereas The Observer has become a lot livelier."

Under Mr Alton, the 216-year-old title has won plaudits for content which includes monthly supplements about food, sport and music. Another supplement, Observer Woman, was named the launch of the year at last year's British Society of Magazine Editors awards.

But relations between staff on The Observer and The Guardian have been souring for some time, especially between Mr Alton and Alan Rusbridger, the editor of the latter. Under Mr Alton, The Observer was fiercely independent of the editorial stance taken by The Guardian, most notably by being an outspoken advocate of the war in Iraq. The Guardian's writers, in turn, have criticised The Observer's coverage of the row over the MMR vaccine.

Mr Alton has also come under increasing pressure as his proprietor, Guardian Media Group, looks to secure its long-term future on the internet. It recently launched a Guardian America website in an attempt to woo readers in the US. The two papers are preparing to move to new offices in King's Cross, north London, and Mr Alton has been encouraged to bring The Observer brand closer into line with that of The Guardian – by forcing staff to emulate Guardian journalists, who write additional online material, and by abandoning its traditional working patterns.

The Observer was founded by W S Bourne in 1791, when stories were accompanied by woodcut illustrations. In its early years it was known as a Tory paper but it became more liberal after the Second World War under David Astor, who edited the paper for 27 years. Last night, Astor's successor Donald Trelford, editor from 1975 to 1993, voiced sadness at the departure of Mr Alton, who he said had "stamped his personality" on the title. He added: "I have been surprised and delighted that Roger has been able to maintain such a distinctive identity for The Observer. I sincerely hope this will not be lost under any new arrangements."

Mr Alton, who leaves at the end of the year, will be succeeded by his deputy John Mulholland. There is speculation among staff that a new weekend editor, reporting to Mr Rusbridger, will be appointed to oversee the Saturday edition of The Guardian and The Observer.