Tesco , the world's third-biggest retailer, said the head of its UK business is to quit the firm, raising questions over its strategy in its biggest market two months after a profit warning sent shock waves through the grocery sector.

The firm said on Wednesday UK CEO Richard Brasher will step down from the board with immediate effect and leave the company in July once he has effected a transition of the UK business.

It said the move follows group CEO Philip Clarke's decision to take a much closer involvement in the UK business.

I have decided to assume responsibility as the CEO of our UK business at this very important time. This greater focus will allow me to oversee the improvements that are so important for customers, Clarke said in a statement.

He told Reuters the announcement categorically does not signal another warning and insisted he had not had a row with Brasher.

The UK's been facing challenges that are long standing. This is a consequence of my wish to take a more active role in the day to day management and nothing else, and Richard recognising you can't have two captains in a team.

News of Brasher's departure came less than two weeks after Tesco announced plans to take on 20,000 new staff in Britain as it battles to regain ground lost to rivals after January's profit warning.

Shares in Tesco, which have lost 18 percent of their value over the last three months, closed Wednesday at 320.6 pence, valuing the business at 25.75 billion pounds.

(Reporting by James Davey; Editing by Mike Nesbit)