THE high-powered board of the Sydney Children's Hospitals Network is in turmoil after the Health Minister, Jillian Skinner, removed its chairman, Roger Corbett, in a dispute over the moving of a senior health executive.

The decision is understood to have upset board members and has prompted the resignation of the businessman Daniel Petrie.

''I am upset by the decision of the minister,'' Mr Petrie said last night, but declined to elaborate.

Ms Skinner announced the ''termination'' of Mr Corbett's appointment in a notice published in the government gazette yesterday.

She declined to explain her reasons for removing Mr Corbett, who is chairman of Fairfax Media, publisher of the Herald.

However, it is understood to have followed a disagreement over an attempt to persuade the chief executive of the hospitals network, Elizabeth Koff, to take up a deputy director-general's position within NSW Health.

Ms Koff was encouraged to apply for the position by the director-general of NSW Health, Mary Foley, and sought the advice of Mr Corbett.

Ms Koff is the inaugural chief executive of the hospitals network, formed about a year ago by bringing together the management of the Sydney Children's Hospital, Randwick and The Children's Hospital at Westmead.

Mr Corbett is believed to have written to Ms Skinner expressing the view that, given her importance, Ms Koff should stay on until a replacement was found, causing the minister to accuse Mr Corbett of interference and demand his resignation earlier this week. It was followed by an official letter requesting his resignation by a specific date, which Mr Corbett is believed not to have met.

Sources close to the board suggest Mr Corbett sought an explanation as to why he should resign in a letter yesterday, but Ms Skinner terminated his appointment.

The same sources insist Mr Corbett had the full support of the board, which they say was not adequately consulted by Ms Skinner or Ms Foley about the move to shift Ms Koff to a new role.