Chelsea Football club are in turmoil after a second high profile departure in a matter of days

Respected and talented Sporting Director Frank Arnesen has resigned “to seek a new challenge".

He is credited with bringing through much of the new young talent at the West London side – Chelsea have confirmed he will leave will leave at the end of the season.

The news will come as a further shock to Blues fans already reeling from the sacking of long-serving assistant manager Ray Wilkins last week who is claiming  unfair dismissal and seeking legal advice from the Leauge Managers Association.

It rounds off an awful November at Stamford Bridge who have lost three of their last four league games and comes on the day they drop to third after surrendering top spot to Manchester United.

There has also been speculation about the future of manager Ancelotti, but the Italian moved the quash rumours at a press conference on Monday, saying: "These rumours [of me leaving] are untrue. I've no idea where they've come from."

The 54-year-old Dane has spent five years at Chelsea managing the club's youth development.

He said: "It has been a privilege and an honour for me to work for such a big club with so many great people”.

"It has been a tremendous journey and I would like to thank everyone at Chelsea, especially Roman [Abramovich, the Chelsea owner], for giving me the incredible opportunity to help build on the club's academy and youth system along with our greatly talented academy and scouting staff.

"We are now seeing the fruits of that labour as our stated aim was to get one player from the academy into the first team each year from 2010.

"We have a great crop of young players now coming through, and I feel it's the right time for me to start looking towards a new challenge.

"It is always difficult to take big decisions like this, but it is entirely my decision.

"I will always be grateful to the club and Chelsea will always be in my heart."

Blues chairman Bruce Buck added: "Frank has spoken to me several times over the past year with regards to seeking new challenges, so his decision comes as no surprise to us.

"Frank has done an exceptional job here at Chelsea over the last six years and the incredibly strong academy and youth system Frank leaves behind him is a fitting tribute to his time at Chelsea.

"We do appreciate that he has given us plenty of notice which gives us time to consider whether and how we restructure the football department."

Wilkins is believed to be seeking compensation beyond the remainder of his contract. The deal expired at the end of the season and was worth £400,000 a year.

Wilkins said: “I’m very disappointed the board decided that I had no further contribution to make at Chelsea.Since rejoining the club, I am extremely proud to have assisted in its recent successes.

“My relationship with the staff, players and fans was fantastic, and I wish them all the best.

“The LMA are assisting me in obtaining answers to a number of questions arising from my undoubtedly unfair dismissal. All efforts are being made to reach an amicable solution.”

A win tomorrow away to Newcastle will put Chelsea back on top spot.