Sir Stuart Rose came under renewed pressure over his controversial elevation to Marks & Spencer's executive chairman today as 48 local authority pension funds threatened to table a motion against him at the retailer's next annual meeting.

The Local Authority Pension Fund Forum (LAPFF), whose members manage about £95bn of Government employees' assets, said it would file a special shareholder resolution at next year's meeting if M&S "continues to breach corporate governance best practice".

Ian Greenwood, chairman of the forum, described M&S's position over Sir Stuart's promotion from chief executive as "shaky". He said the move increased the risk of M&S going downhill and highlighted the unfavourable current retail environment.

"We believe that concerned shareholders have no alternative but to continue to push for the combined roles to be separated," Mr Greenwood said.

M&S, which issued a shock profits warning earlier this month, infuriated some of its biggest shareholders when it moved to install Sir Stuart, a popular chief executive, into the new, combined role of executive chairman.

Legal & General, one of its largest owners, publicly questioned the move, complaining that it had only learned of the plan an hour before it was announced.

Rules on best boardroom practice put in place by Sir Derek Higgs, the former banker who died in April, frown on the idea that a chief executive can move into the chairman's job, which ostensibly involves policing the top executive.

Investors accounting for about 22 per cent of shareholders, refused to back his re-election at the annual meeting. Even on the day, institutional investors were demanding fresh talks with the retailer over the move.

The forum, whose members are thought to own at least 1 per cent of M&S shares, said if M&S refused to back down it would table a special resolution demanding that the roles be separated.

Mark Burgess, Legal & General Investment Management's head of equities, reiterated the manager's view yesterday that it was crucial that a chairman be independent.

M&S said that Sir Stuart's re-election gave its executive a clear mandate.

It said that the combined code was a set of guidelines rather than firm rules. It argued that it had met the "comply or explain" part of the Higgs combined code rules, arguing that Sir Stuart was a remarkable executive who needed to be retained by the retailer.

A spokesman said: "The LAPFF is entitled to its views but the combined code is a set of guidelines, not rules – requiring explanation if not complied with, so they are not absolute rules.

"The board has stated its reasons behind the decision and Stuart’s re-election was backed by shareholders at our AGM earlier this month. We have nothing more to add."

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