While the company would not comment when contacted this afternoon, there has been growing speculation that Mr Gay would step down following revelations in The Examiner last month that interstate business interests had pressured him to quit.

Mr Gay would not comment when phoned this afternoon, saying he was on holiday.

Former Premier Robin Gray is also expected to announce he will resign from the board.

A family source had confirmed that a statement was due to be released at 4pm but there is yet to be an ASX announcement.

Mr Gay had been chairman and chief executive of the company until last July, when Greg L'Estrange took over as chief executive.

Mr Gay has stayed involved with a management role for his pet project, the controversial $2.5 billion pulp mill at Bell Bay.

Gunns had been due to make a statement to the Australian Securities Exchange by the end of this month about the possible rationalisation of its different business components,

including making the pulp mill a separate business.

No ASX release has been made today.

Gunns is still seeking a financial backer for the mill.

There has also been speculation about the future of Gunns' retail arm _ with rumours that Tasmanian store K&D Warehouse were interested in a takeover, while Woolworths

has also been touted as a purchaser _ given its intent to penetrate the retail sector that its rival Coles enjoys with its Bunnings Warehouse brand.

Some analysts also fear that Gunns may relocate its head office to the mainland.