Serco's UK and European chief executive Jeremy Stafford has resigned in light of the electronic monitoring overcharging scandal.

The security firm's group chief executive Christopher Hyman also quit last month, the same day that rival G4S confirmed the departure of its CEO Richard Morris. Both companies are involved in a row with government over billing practices on an electronic tagging contract, which has led to the Ministry of Justice being overcharged by millions of pounds.

Serco has been working to refresh its relationship with central government over the last four months, since the billing issues were revealed.

"Serco and Jeremy Stafford, chief executive of UK and Europe, have concluded that a change in the senior leadership of our UK and Europe division would accelerate and consolidate that process," the company said.

Stafford stepped down yesterday, and will pursue opportunities "outside Serco".

The company is also separating the UK and Europe division into two. The chief operating officer (COO) of the division, Andrew White, will take over as CEO in the interim.

Serco recently warned on profits and announced 400 job cuts after falling out with government.

A serious Fraud Office investigation into Serco and G4S's role in the overcharging row is ongoing. However, Cabinet Office minister Francis Maude recently said that he believes both companies will emerge 'renewed and stronger" after a review of government contracts.