Last updated at 13:35 05 October 2006

The most powerful woman on the high street is quitting Topshop in a dispute over Kate Moss, sources revealed today.

Jane Shepherdson, the director of the fashion retail giant has handed in her notice, following reports today that she was not consulted over the hiring of Kate Moss as a designer.

Topshop is expected to release a statement later today to confirm that their style guru, who single-handedly transformed the fortunes of the retail group is "going".

A source at the company said: "Jane has resigned. She disagreed with the signing of Kate Moss as a designer and she is angry that she was not consulted over it."

The dispute has cast a shadow over what was previously seen as a masterstroke — teaming up the most famous face in fashion with one of the coolest high street names.

Friends of Ms Shepherdson have said that relations with Sir Philip Green, boss of Topshop's parent company Arcadia, broke down following the contract with Moss, which was announced before London Fashion Week last month, according to today’s Times.

It was Sir Philip's name which was linked with the deal, not Ms Shepherdson's. Sir Philip met Moss last summer when he bid £60,000 at a charity auction for a kiss with her — only to pass on the prize to Jemima Khan.

Further meetings between the stores mogul and the supermodel prompted rumours that they were considering a collaboration, although many doubted Moss would commit.

What persuaded her, according to Sir Philip, was that "she knew she could trust us".

He said when the deal was announced: "So many celebrities have been ripped off when they’ve

collaborated on lines, but she knows that we’re serious. This is about Kate developing her career beyond modelling."

However, it now seems that Sir Philip overlooked the need to keep onside the woman who made Topshop what it is today.

Once seen as a purveyor of forgettable tat, Topshop is now a cool place to shop for everyone from teenagers to celebrities — and Ms Shepherdson is the woman who deserves the credit.

Once named the most important woman in fashion by Drapers, the fashion business journal, she has

masterminded Topshop's 10-year transformation to crown jewel in Sir Philip's empire.

It has sales of £600 million, is expected to produce profits of £100 million this year, and is planning stores in Russia, New York and Paris.

As well as having a flair for design, and the judgment and confidence to recruit unknown, talented young designers, Ms Shepherdson has

introduced such innovations as VIP rooms and personal stylists, once the preserve of more upmarket stores.

Ms Shepherdson's alleged departure comes after a bad week for Sir Philip, who was forced to concede that a 54 per cent plunge in operating profits at his Bhs chain had been "self-inflicted".

Ms Shepherdson was said to be unavailable for comment, as was Sir Philip.