Club Mediterranee founder, Mr Gilbert Trigano and his son, Serge, yesterday left the celebrated holiday-village empire, proclaiming their disgust at plans for the group laid down by its new directors. "I am leaving because the club is losing its soul, its spirit, based on love, on the family," said Mr Serge Trigano, Club Med's former chief executive, who stood down on Thursday as chairman of a supervisory board.

He took over the post in February after being ousted as Club Med's chief executive following record losses in the 1996 financial year.

His father, Gilbert, resigned as the group's honorary chairman and a member of the supervisory board.

They said they strongly disagreed with the direction Club Med was taking under Mr Philippe Bourguignon, the former Disneyland Paris chief who took over in February.

Mr Bourguignon took over after Club Med posted unexpected record losses of 743 million francs (£82.6 million) in the 1996 financial year. It was only the second negative result in Club Med's history; the first, in 1991, was attributed to the Gulf War.

Club Med shareholders had welcomed Mr Bourguignon, who is due to announce a strategy for the company for the 21st century, after the losses were announced - ending Trigano family control.

Club Med, which had posted profits of Ffr168 million in the previous financial year, is facing stiff competition from both French and foreign companies. Observers say it needs to keep up with changing markets as holidaymakers become more independent and cost-conscious.

They say Club Med's all-inclusive formula makes its holidays look expensive when compared to vacations without the food, drink and entertainment included.