The chief executive of major London Fashion chain Ted Baker has “agreed to resign” over allegations of inappropriate behaviour.

Ray Kelvin took a voluntary leave of absence in December after the chain launched an independent investigation into claims of forced hugs and harassment.

He has denied any wrongdoing and described the allegations – including claims he massaged employees and asked some to sit on his lap – as “deeply distressing.”

In a statement, Ted Baker said Mr Kelvin had quit with immediate effect – with the company’s acting CEO Lindsay Page to continue in the role until the appointment of a permanent successor.

The company said its independent committee, working alongside law firm Herbert Smith Freehills (HSF), was continuing its investigation of the allegations.

It said the investigation was primarily focused on "Ted Baker's policies, procedures and handling of complaints."

It is expected to finish its work within weeks.

Mr Kelvin remains the company's largest shareholder with almost 35% of the stock.

File photo of a shop sign for Ted Baker in central London, 06-01-2016.

He said in a statement: "Difficult though this decision is given that Ted Baker has been my life and soul for over 30 years, I've decided that the right thing to do is to step away from Ted and allow the business to focus on being the outstanding brand it is so it can face 2019 with fresh energy and renewed spirit.

"As a shareholder in the business I'll support Lindsay in his leadership and be available to him and the team wherever I can offer helpful advice.

"I'm extremely proud of what we've achieved in building Ted Baker to the global brand it is today.

"Thank you to every single colleague, customer, supplier, and investor for your commitment to the business. We couldn't have done it without you and I'm so grateful.

"The past few months have been deeply distressing and I'll now be taking time privately with my family to consider what my next adventure will be.

"Bye for now, Ray."

Shares in the company fell almost 5% as markets opened after the announcement.

Just last week, it issued a profit warning to shareholders on the back of a series of costs to the business.