The CEO of the West-North West Hospitals Group has resigned following a conflict of interest controversy.

It had emerged recently that Noel Daly holds a 50% stake in a firm that was appointed to review maternity services.

A HSE audit had found that the the appointment of this consultancy was in breach of HSE financial regulations.

Commenting on the resignation, Health Minister James Reilly said Dr Daly did not want his reputation nor the reputation of the hospital group to be compromised.

"Minister Reilly shares those concerns and has accepted Noel Daly's resignation," the Department of Health said in a statement.

The Minister thanked Mr Daly for his work on behalf of the West-North West Group.

The formation of hospital groups, which will eventually become independent trusts, has been a key component of James Reilly's health reform plans.