The resignation of Marie Donnelly as chairman of the Irish Museum of Modern Art brings to an end another week of extraordinary events in the museum's history.

The board of the IMMA voted to appoint a new director only to have him turn the position down, two members of the board resigned, and yesterday the Minister for Arts, Heritage, Gaeltacht and the Islands accepted Ms Donnelly's resignation.

The position of director had been vacant since last April, when the then director, Declan McGonagle, resigned after a long-running and very public dispute with Ms Donnelly. She had informed him in November 2000 that his job was to be advertised, but the board overturned this and renewed his contract.

He then left anyway, with a settlement that reportedly cost the institution £460,000.

The search for a new director began in July, with national and international advertisements, including in the widely read art journal, Art Newspaper.

The board nominated an interview panel. These were the acting director, Philomena Byrne, or, in her absence, the senior curator, Catherine Marshall; David Ross, former director of the Whitney Museum of American Art; board members Eoin McGonigal SC and the artist Felim Egan; the chairman, Ms Donnelly; and from outside the art world, mediation and industrial relations expert and former general secretary of the ICTU, Peter Cassells.

Mr McGonigal withdrew from the panel in September because of professional commitments.

There were 18 applications for the position, of whom five were short-listed. They included Dr Brian Kennedy, former assistant director of the National Gallery and at present director of the National Gallery of Australia. Two of the five withdrew, leaving three.

At this stage Dr Kennedy also withdrew his application, but he later asked for it to be reinstated, and interviews were scheduled for October 16th. He was interviewed by video link-up from New York as he was unable to attend.

Dr Kennedy has been a controversial director of the NGA, with an unprecedented level of media coverage of his stewardship of this national institution, relating both to his exhibition policy and to his management of staff, where there has been a large turnover.

These issues arose at the interview, and the panel agreed that, while he scored better than the other candidates, it could not agree to recommend him to the board, having earlier agreed that its recommendation should be unanimous.

Apart from the issue of his management policies, there was concern about his lack of background in contemporary art, which was outlined in a note to the board from the staff representative, Ms Marshall. Egan and Donnelly supported his candidacy.

The panel agreed that he should be invited to a second, face-to-face, interview in Dublin, as the video link-up had not allowed for spontaneous exchanges between him and the panel.

Accordingly this was arranged for November 19th.

He was also asked to provide references at this stage.

The meeting began with the circulation of his CV and qualifications. Marshall also placed before the meeting an article from Art Newspaper, which outlined the history of his tenure to date in Canberra.

"One of Dr Kennedy's biggest problems has been a tendency, under pressure, to fudge and evade," it maintained.

However, it also said that many of his problems stemmed from resentment of the fact that a non-Australian got the job.

The November interview did nothing to change the collective mind of the interview panel. Indeed, as the letter from Cassells to Donnelly this week states, he actually emerged from it with a reduced score.

Some panel members were particularly perturbed by a remark made by Mr Kennedy at the outset of the interview. Describing his work in the Department of Education, he made an offensive and derogatory comment about some of the people he met there.

Panel members were shocked, not just at the comment itself, but the inappropriateness of making it in such a formal context.

The panel remained split three-two on his suitability, and it agreed to recommend to the board a wider search, using specialist recruitment consultants.

They also agreed to keep Dr Kennedy in consideration in this context. That position was registered in a brief note for the board dated the day of the interview.

However, following the meeting Ross changed his position. In an email to Donnelly from Martha's Vineyard, dated November 22nd, he expressed doubts that Kennedy would stay interested in the position in the context of a widened search.

"I advise you to overturn our ill-considered decision and directly invite Brian Kennedy to accept the position of IMMA's director," he wrote.

Donnelly then set about calling a board meeting. Originally suggested for over the weekend of November 24th/25th, it took place on Monday 26th at 5 p.m.

The company secretary, Frank Brennan, who is an IMMA staff member, was told not to bother attending, as was the acting director, Philomena Byrne.

Nine people attended. According to Donnelly, one of them, Fiona O'Malley, was asked to take minutes in the absence of the secretary, though some other members of the board do not recollect this.

In any case, minutes exist, though no subsequent meeting has taken place to ratify them.

According to Donnelly's letter to Peter Cassells yesterday, "the purpose of the board meeting was to bring the board up to date with developments and to seek further directions.

"In the course of the board meeting the board decided that the position should be offered to Dr Kennedy.

"I did not call the board meeting for the purpose of offering the position to Dr Kennedy."

The purpose of the meeting is perceived differently by board members Niall Crowley and Terry Prone, who later resigned.

While neither of them expressed any objections to Kennedy (indeed, Prone said she "knew and liked the man"), they both expressed concern about the integrity of the process, which, according to Crowley, "was ignored in what became a headlong rush to appoint the candidate preferred by the chairperson."

According to O'Malley's minutes of the meeting, a discussion took place during which the points made included a fear that Kennedy would not stay in the process, the fact that the board had the right to accept or reject the recommendation from the panel, and that a unanimous view had not been sought from the panel.

A vote was then taken on whether to continue the search or offer the position to Kennedy. Taxis were waiting outside the meeting for two of the board members.

Seven voted in favour of offering him the position, while Crowley and Prone voted to continue the search.

They then said they would resign. The board decision was communicated to Kennedy by phone.

On Wednesday the resignation letters of Crowley and Prone were published when The Irish Times broke the story.

Donnelly wrote a four-page letter to S∅le de Valera, defending the integrity of the process and the appointment.

This was made available to the media. On Thursday the board issued a statement unanimously backing her.

The Minister asked Crowley and Prone to see her about their concerns.

However, in the meantime the chairman of the National Gallery of Australia told the Australian media that Kennedy would be completing his five-year contract there, and not accepting the IMMA offer.

This became known to de Valera, staff in the gallery and the board, though it was not communicated directly to them.

Then, in a highly unusual development, Cassells wrote to the Minister saying that Donnelly had "totally misrepresented" his position.

He enclosed a copy of the letter he had sent to Donnelly disputing her version of the interview process. This too was made available to the media.

With Kennedy rejecting the position and Cassells calling her version of events into question, Donnelly appeared to run out of options.

Yesterday, she tendered her resignation.