LONDON (Reuters) - Preferred candidate Malky Mackay is out of the running to take charge of Crystal Palace after the English Football Association (FA) opened an investigation into the conduct of the Scot during his time at Cardiff City, British media reported.
The Daily Mirror and Daily Mail both reported that the FA were looking into a series of text messages sent between Mackay and Crystal Palace director of football Iain Moody when the pair worked together at Cardiff.
Moody left his role as head of recruitment at the Welsh club at the end of last year after being suspended by Malaysian owner Vincent Tan and Mackay was sacked in the final days of 2013 after a public disagreement over transfer spending.
Moody joined Palace soon afterwards when Tony Pulis was taking over as manager of the South London club. He led them to an 11th place finish in the Premier League last term, while Cardiff were relegated.
Palace said Moody had resigned on Thursday.
"In light of the events of yesterday, sporting director, Iain Moody has tendered his resignation and it has been accepted with immediate effect," a Palace statement read.
Pulis, who was named Premier League manager-of-the-season after his work steering Palace away from relegation, rocked the club by standing down as boss two days before last week's opening fixture against Arsenal.
Former Scotland defender Mackay had been expected to take charge of Palace and reunite with Moody this week ahead of Saturday's London derby at home to West Ham United.
British media also reported that former England manager Glenn Hoddle, who had just taken an assistant coach role at London rivals Queens Park Rangers, had turned down the job after an approach from Palace co-chairman Steve Parish on Wednesday.
Tim Sherwood, who took charge of Tottenham Hotspur for six months last season, is now favourite to replace Pulis with another former Spurs manager, Martin Jol, also in the mix.
Until an appointment is made, however, Keith Millen, who oversaw the opening 2-1 defeat by Arsenal on the opening day of the Premier League, will continue in charge of the first team.
(Writing by Patrick Johnston and Martyn Herman; editing by Tim Collings)