"I decided to call an urgent board meeting today because I believe that the club needs a change of direction and as a result I have decided to resign as president of Real Madrid," Perez told reporters in a press conference on Monday night.

"Something has been going wrong and everyone could see that in yesterday's match against Mallorca. That's when I made up my mind to leave.

Real slumped to a 2-1 defeat to Mallorca on Sunday to suffer a blow to their chances of catching up with pace-setters Barcelona.

"I hope this decision will help us change direction and I believe that we still have a chance of achieving something in the European Cup this season. At the very least I hope it will enable us to plan properly for next season," he added.

Perez, a 58-year-old construction magnate, took the helms at Real in 2000, replacing Lorenzo Sanz and was two into his second term as Real president after being re-elected in July 2004.

Under Perez, Los Meringues won two Primera Liga titles and a UEFA Champions League trophy.

Despite Perez bringing in a horde of 'galacticos' like Luis Figo, Zinedine Zidane, Ronaldo and David Beckham, Real has went two seasons without a major trophy.