Athletics-Coe quits ambassadorial role with Nike

* Coe severs 38-year association with sportswear company

* Says it has become a distraction for Nike (Sao Paolo: NIKE34F.SA - news) and IAAF

* "Perception and reality have become horribly mangled"

* IAAF president also to stand down as British Olympic head (Adds quotes, background)

By Mitch Phillips

MONACO, Nov 26 (Reuters) - IAAF president Sebastian Coe quit his ambassadorial role with sportswear company Nike on Thursday, finally succumbing to weeks of pressure over a potential conflict of interest.

Coe, who became head of the ruling body of world athletics in August, has been associated with Nike for nearly 40 years but has repeatedly rejected such accusations.

However, as the athletics world battles a succession of doping and corruption issues, the situation clearly became untenable, the former Olympic track star said.

"I've made the following decisions: I've stepped down from my ambassadorial role with Nike which lasted 38 years. The current noise level around it is not good for Nike or the IAAF and is a distraction," Coe told a news conference following an IAAF Council meeting.

Coe said he had sought advice from the IAAF's Ethics Committee and was told he could retain his position in Nike and sports marketing firm CSM as long as he did not seek to influence any decisions which could have an impact on them.

"I'm grateful for that advice but it is clear that perception and reality have become horribly mangled," he said.

Coe also announced that CSM will not tender for any contracts that might lead to allegations of a conflict of interest.

The British double Olympic 1500 metres champion also said he was stepping down as chair of the British Olympic Association (BOA) after next year's Rio Games.

Pressure had been building on Coe over the issue for several months but the final straw appeared to come this week when a leaked internal Nike email appeared to show him supporting the bid of Eugene, the U.S (Other OTC: UBGXF - news) . city with close links to the company, to host the 2021 world athletics championships.

In April this year the hosting rights were awarded without a bidding process, much to the surprise of the Swedish city of Gothenburg which was in the process of preparing to present its own case.

Coe said on Thursday that his communication with the Eugene bid committee was completely above board and consisted of him merely encouraging them to bid for the event, having missed out to Doha for the 2019 edition.

He said that there had been no strong call for him to walk away from Nike while running the London 2012 Olympics but accepted in the light of the crisis currently engulfing his sport that it had become a distraction.

"I don't believe it was a conflict of interest," he said. "I always declared it, and a range of others, but I just felt I needed to focus unflinchingly on the challenges ahead with my colleagues."

Coe also said he had made the decision before the release of the Nike email this week but wanted to wait to meet his Council colleagues face-to-face before announcing the decision.

He is reported to earn around 100,000 pounds annually from Nike, and has been a hugely successful businessman since retiring from the track but his IAAF presidency is an upaid role -- something that might be changed in the future.

"Considering what Seb (Other OTC: SEBYF - news) has given up the athletes want someone at the top to be paid to deliver professional services for the sport," said former Namibian sprinter Frankie Fredericks, a Council member and head of the IAAF Athletes' Commission.

The issue dominated Thursday's news conference, with little time allocated to Russia's suspension over a doping scandal and its chances of cleaning up its act in time to compete in next year's Olympics.

Earlier on Thursday Russian athletics officials said they would not be appealing against the suspension and would work with the IAAF and the World Anti-Doping Agency on a "pathway to re-admittance".

(Editing by Toby Davis)