THE Scottish businessman who heads one of the UK's largest companies has surprised the business and political worlds by announcing he will walk away from his multimillion-pound job to become an unpaid trade minister.

Glasgow-born BT chief executive Ian Livingston, 48, a Celtic director who earned £8.5 million with the telecoms giant last year – including £5.8m in long-term shares – will not receive a penny in salary when he takes up the government post in September.

David Cameron, who unveiled the appointment of Mr Livingston at Prime Minister's Questions yesterday, said he would "bring huge talent to a vital national effort" of trying to grow Britain's trade in new global markets.

Mr Livingston, who will be given a peerage, helped return BT to growth, ploughing resources into broadband services and most recently investing £1 billion into live sports coverage, including English Premier League games, to be delivered to its broadband customers.

The former accountant, who became the youngest FTSE-100 finance director when he joined Dixons aged just 32, will take the Conservative whip in the Lords. BT would not be drawn on whether he would receive a pay-off. He will take up his new post in December.

Mr Livingston, who replaces former HSBC chairman Lord Green, admitted the move into politics had caught even him unawares.

He said: "This was not in my plans or my timing but it is something really important and a difficult thing to say no to. If someone said to me six weeks ago I'd be doing this, or even four weeks ago, I'd have been extremely surprised."

Mr Livingston reportedly added: "I thought about it and I went to see the Prime Minister and he said the country needs you. When the Prime Minister says that it's quite difficult to say no, so I decided to accept it."

He will be replaced at BT by Gavin Patterson, who has served as chief executive of its retail division and on the board since 2008.

Mr Livingston added: "It has been an incredibly hard decision to leave BT at such an exciting time.

"However, the opportunities ahead and the strength of the management team that Gavin will lead mean that the company is in a great position."

BT chairman Sir Michael Rake said Mr Livingston had done a tremendous job in transforming the company.

He said: "His decision to accept a government post demonstrates the sense of public service which many of us know to be characteristic."

A Downing Street source said the UK Government was delighted to have "got someone of the stature of Ian Livingston" to replace Lord Green.

It is thought Lord Green stood down as a minister because of the punishing travel schedule of a trade minister. The source stressed that, in any case, he had only planned to do the job for a maximum of three years.

Lord Green spent three years as HSBC chief executive before being appointed chairman in 2006, a role he remained in until he was brought into Government.

He faced questions about his role as a minister after a US Senate investigation found HSBC had not taken sufficient action to prevent money-laundering during his time in charge.

Iain McMillan, director of CBI Scotland, said: "Lord Green has done a great job encouraging British business to do more overseas.

"His successor is very able and experienced and the CBI looks forward to working with him to further improve the country's export performance, rebalance the economy and attract inward investment."

Mr Livingston took over at BT when the former state-owned monopoly was burdened with huge debts and spiralling costs.

Within months of his promotion from group finance director, the company issued a profits warning as its global services arm – which handles telecoms networks for major organisations – missed City targets by £80m.

BT's shares plunged to as low as 70p in the following months as analysts warned the group looked dangerously "accident-prone".

But Mr Livingston, who studied at Manchester University, wrote down £1.3bn on several major contracts amid a rapidly deteriorating economic climate. Tens of thousands of jobs were axed and the company set about attempting to plug a £4bn gap in its vast pension scheme.