BT Group PLC said group finance director Ian Livingston has been appointed chief executive of BT Retail with effect from February 2005, replacing Pierre Danon.

Danon, who will be leaving in the new year, was understood to have fallen out with BT group chief executive Ben Verwaayen over whether the consumer-facing division should invest in expensive new infrastructure at local telephone exchanges.

Both Danon and Verwaayen have strenuously denied such a rift. Livingston said BT’s retail division would not be changing its strategy when he takes the helm

‘There’s a retail strategy very much shared by the whole group and that will very much carry on,’ he told reporters on a conference call.

Livingston said he did not envisage eventually taking charge of a separate business, if, as some have speculated, industry regulator Ofcom forces a split of the retail group from BT group.

BT recently dismissed a report suggesting that its retail division would spend hundreds of millions of pounds on local loop unbundling, a move that would effectively split the UK telecoms giant in two.

‘This a highly speculative story and this (a move into local unbundling by BT Retail) is currently not company policy,’ BT said.

Livingston said his position on LLU is ‘exactly the same as’ that of both Danon and Verwaayen’s.

‘LLU has to be an option for retail, but it is not a preferred option …’

Livingston, 40, has been group finance director and a member of the board since April 2002.

Previously he was finance director of electrical retailer Dixons Group PLC.

Hanif Lalani has been appointed group finance director in place of Livingston and will take up his post in February. Lalani is currently chief financial officer of BT Wholesale.”