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McClaren, who led the team to its first ever league title in 2010, said the recent form slump prompted him to walk out on a contract that ran until 2014.
“The club is bigger than any one individual and Twente is too big in my heart to stand in the way of its progress,” the former England coach said.
Twente lost 2-1 to struggling SC Heerenveen on Saturday to seal McClaren’s fate and end his second period in charge of Twente.
McClaren’s coaching career began as assistant to Alex Ferguson at Manchester United before a successful stint at Middlesbrough, which he led to a League Cup title in 2004.
FC Twente Enschede coach Steve McClaren gestures on February 23, 2013 during a Dutch league football match against SC Heerenveen in Heerenveen. - AFP
He was appointed England coach in 2006, but lasted only 18 months before being sacked when England failed to qualify for the 2008 European Championship.
McClaren joined Twente for the first time in 2008, taking the team to a second-place finish in the league in his first season and going one better in his second season when Twente won the league for the first time.
He then left Twente for Wolfsburg, becoming the first English coach of a Bundesliga team, but he lasted only eight months before poor results led to his sacking. His next stop was Nottingham Forest, but his tenure there was even shorter, quitting after only 10 matches in charge.
He returned to Twente a year ago and the club finished last season a disappointing sixth in the Eredivisie.
This season started better for Twente and the team was joint top of the Eredivisie at the season’s halfway mark, but following the league’s winter break its winning ways evaporated. In a string of disappointing results that led to unrest among the team’s fans, it could only draw 1-1 at home to last-placed Willem II and lost to Utrecht and Heerenveen.
“We believe Steve McClaren could have turned around the disappointing results for FC Twente,” club chairman Joop Munsterman said. “But Steve said it is in everybody’s best interest for him to leave the club immediately.”
McClaren’s assistant, Alfred Schreuder, was named interim coach.
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