• Allardyce departs with Gareth Southgate taking over for next four games • Reign as England manager lasts only 67 days

UPDATE. September 2017: lawyers for Sam Allardyce have contacted us to say that he disputes the allegation that he gave advice on how to circumvent the FA’s rules on third party ownership.

Sam Allardyce, who had insisted he could succeed where so many others had failed in making England a force again in world football, has lost his job in the aftermath of an undercover newspaper investigation.

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Allardyce, who was appointed England manager 67 days ago after the national side’s Euro 2016 humiliation, had described the role as his dream job.

But the former Bolton Wanderers and West Ham United manager now finds himself hugely embarrassed after his departure was announced on Tuesday night, despite leaving with a 100% record following an unconvincing 1-0 victory against Slovakia in his only international match in charge.

Allardyce’s future was thrown into doubt on Monday night when the Telegraph published the results of an undercover investigation that showed him negotiating a fee of £400,000 to represent an overseas firm that was hoping to profit from Premier League transfers, before he had even named his first squad.

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A dramatic day began with the FA chief executive, Martin Glenn, and the newly appointed chairman, Greg Clarke, arriving at Wembley for a series of crisis meetings, as Allardyce set off for Wembley from his Bolton home. It ended with news filtering out to the media crews huddled outside that a “deeply disappointed” Allardyce had agreed to quit by “mutual consent”. He will be replaced for the next four matches, against Malta, Slovenia, Scotland and Spain, by the under-21 manager, Gareth Southgate.

Alongside a general impression of greed that will not have played well with fans or an FA workforce that has recently undergone a round of redundancies, there were specific issues in the taped conversations that the FA felt it could not ignore.

Allardyce also offered advice on how to “get around” the FA’s own regulations on third-party ownership, was disparaging about his predecessor Roy Hodgson’s speech impediment, said that assistant Gary Neville should “sit down and shut up”, and criticised the FA’s “stupid” -Wembley redevelopment.

Facebook Twitter Pinterest Sam Allardyce arrives back at his home in Bolton. Photograph: Paul Currie/BPI/REX/Shutterstock

While some of those remarks could have been explained away as embarrassing indiscretions, the advice on circumventing the FA’s own transfer regulations was particularly problematic ahead of a week in which it may be forced to announce investigations into other elements of the Telegraph’s revelations.

“Allardyce’s conduct, as reported today, was inappropriate of the England manager. He accepts he made a significant error of judgment and has apologised,” the FA said in a statement.

“However, due to the serious nature of his actions, the FA and Allardyce have mutually agreed to terminate his contract with immediate effect. This is not a decision that was taken lightly, but the FA’s priority is to protect the wider interests of the game and maintain the highest standards of conduct in football. The manager of the England men’s senior team is a position which must demonstrate strong leadership and show respect for the integrity of the game at all times.”

Allardyce said he was “deeply disappointed” after offering a “sincere and wholehearted apology” for his actions.

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“Although it was made clear during the recorded conversations that any proposed arrangements would need the FA’s full approval, I recognise I made some comments which have caused embarrassment,” Allardyce said. “As part of today’s meeting, I was asked to clarify what I said and the context in which the conversations took place. I have co-operated fully in this regard.”

If the manner of Allardyce’s “mutually agreed” exit – a day of fevered speculation that ended in an outcome that felt increasingly inevitable – did not feel unusual in taking its place among a string of similarly premature and controversial departures by some of his predecessors, then the length of his reign certainly was.

The 61-year-old said in July he was “extremely honoured” and promised to return the feelgood factor to an England setup demoralised by a Euro 2016 defeat to Iceland that led to the departure of Hodgson. Handed a £3m-a-year contract, plus bonuses, he said he had fulfilled his lifetime’s ambition by taking over as England manager. But he leaves with the unwanted record of the shortest managerial reign for a permanent appointee.

The FA said it had turned to Allardyce following a “comprehensive and structured” process led by Glenn but also including vice-chairman, David Gill, and technical director, Dan Ashworth. Clarke, the former Football League chairman who took the same role at the FA in August, was not involved in the decision to appoint Allardyce and was believed to take a particularly dim view of the revelations.

If Southgate impresses he could take the job on a permanent basis, with the FA keen to develop more of a co-ordinated approach across its teams.