Alan Curbishley says he was forced to walk away from West Ham over the club's decision to sell two key defenders.
Anton Ferdinand and George McCartney both left for Sunderland before the close of the transfer windows - deals which left Curbishley fuming.
Curbishley had been keen to bolster his squad with loan deals, but his request was turned down after being informed players needed to leave before fresh faces could be brought in.
The former Charlton manager had believed there was an agreement in place that gave him sole responsibility for the make-up of his squad and following the duo's departures, Curbishley was left with little choice but to leave.
Reserve team coach Kevin Keen has been handed control of first-team affairs until a long-term successor can be found, with ex-Hammer Slaven Bilic among the frontrunners to replace Curbishley.
"It was a culmination of events over the weekend," he told Sky Sports News.
"I was vehemently against the transfer of McCartney because of the injuries to other defenders.
"I was looking at that, along with the sale of Anton Ferdinand, and thinking we are quite stretched. That got to me more than anything.
"On Sunday morning I went into a meeting at Upton Park with [CEO] Scott Duxbury to discuss perhaps hoping to bring some loans in.
"I was told I wouldn't be in that position unless someone left the club. Straight away I said 'let's all go home then. I don't want anyone to leave. I am quite happy we just get on with it as we are'.
"It's been an agonising couple of days. I understand the fans' feelings. But I just felt I couldn't stand by after what had happened at the weekend.
"I think I took the criticism I received from the press and the fans in a dignified manner. I am absolutely gutted I have had to come to this decision."