By Jason Theodorou

The Financial Services Authority has said that Sally Dewar, its managing director of risk, will leave in May 2011. It will be the end of an eight-year career for the regulator's top female employee.

Tipped by some commentators as a strong candidate to replace chief executive Hector Sants, Dewar told staff on Friday that she was not prepared to compete for the post. Her exit comes at an uncertain time for the FSA, with Chancellor George Osborne expected to limit the FSA's powers in next week's speech at Mansion House.

Dewar helped to develop the FSA's expertise in supervising firms, helping it to question business models and decisions by management.

Dewar said in a statement: 'I am very privileged to have had the opportunity to help shape both the supervisory approach and agenda of the FSA as it exists today, and the future global regulatory framework of the financial services sector'.

'Above all, I feel honoured to have worked alongside colleagues who have shown such commitment and professionalism to improve both the robustness of the FSA and the financial system more generally'.

Adair Turner, FSA chairman, said: 'Sally has been central to the transformation that the organisation has undergone in the last few years'.

The Conservatives have previously announced their intention to break up the FSA, giving more powers to the Bank of England and stripping the FSA of the independence granted to the regulator by Gordon Brown in 2007. Business Secretary Vince Cable has spoken out in support of the FSA, but it is unclear whether this will influence Osborne's plans.

The FSA has been more aggressive in supervising the financial sector in the wake of the financial crisis, fining JP Morgan £33 million this month as a 'strong message' to financial services firms that they must be responsible with clients' funds. The FSA has successfully completed two prosecutions for insider deals in the last 12 months.

Dewar's resignation is not thought to be related to the reorganisation plans.

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