Relations between Sir David Henshaw and council leader Mike Storey deteriorated completely over two issues - Merseytram and Henshaw's pension.
Henshaw was 'aggressive' and used 'threatening and abusive language' both to Councillor Storey and the city's Director of Communications, Matt Finnegan.
The man who later succeeded Storey as Council Leader, Councillor Warren Bradley, described Henshaw's behaviour over the tram as "appalling" and admitted: "We should have sacked him on the spot there and then."
Finnegan, who had to deal with the media attention caused by the tram row, described how Henshaw rang him from Scotland where he was celebrating his wedding anniversary.
Henshaw had earlier already argued violently with Storey over his Merseytram comments and Finnegan had been left trying to persuade the media to play down the story.
But Finnegan says:"Henshaw was completely out of control - at first I thought he must have been drinking, he was shouting and swearing and raving like a lunatic. But he was even worse the following morning. It was an astonishing and shocking performance from someone who was supposed to be Liverpool's Number 1 public servant. He totally lost it. It was a bit frightening to hear someone so obviously out of control."
Storey's statement begins by telling how in 1999 Henshaw was 'very keen' to get the job of chief executive and "immmediately made an impact."
"For the first five years, I enjoyed a very effective and successfull professional relationship, although our relationship has always been purely professional and we have never engaged socially," explains Storey.
But the relationship began to change when Henshaw started to demand more media and public attention and tried to claim credit for all the improvements being made in the city.
His manic obsession with trying to control everything that was said about him brought him into direct conflict with both councillors and journalists who were uneasy at the prominence of a public servant.
Storey says:"At times I have felt that David has over-stepped the mark in terms of his own personal media profile.
"In November our relationship deteriorated over the issue of Merseytram.
"I had felt that the issue was being handled badly and the media perception was bad for the city. I gave comments to the press that I would be 'banging heads together'.
"David reacted very angrily and aggressively to this and told me was going to resign, with swearing and abusive language. He also threatened to attack me publicly.
"Things blew over, but our relationship was never the same."
Current Council Leader Warren Bradley, who was a witness to the row between Storey and Henshaw, said:"I shall never forget it - I could not believe what I was hearing.
"Henshaw was absolutely wild - he was effing and blinding at Mike and calling him every name under the sun. I am used to hearing some strong language from people at times, but this was really shocking coming from the chief executive.
"I thought he had lost his marbles to speak to the Leader of the Council in that way. There was no reasoning with him - he was almost foaming at the mouth."
Finnegan who was on the end of phone calls from Storey and Henshaw throughout the row, said: "It was pretty raw and nasty stuff - I was shocked that he spoke to Mike Storey in that way - and then he turned on me too and suddenly started calling me names! It was literally unbelievable. He was like a wild animal just lashing out at everyone, without any reason.
"He kept on threatening to resign, which would have been a disaster for the council at that time - and then he ordered me to arrange for him to go on to the Roger Phillips programme on Radio Merseyside.
"I asked him what he wanted to say on the radio. Henshaw said: 'I am going to denounce the Leader of the Council of course and tell Phillips that I am resigning'. I could not believe my ears, to be honest. I thought he had taken leave of his senses and gone completely mad.
"There was no way that I was going to arrange for him to go and attack his own Council Leader in public. He semed to have got everything out of proportion. Then McElhinney also instructed me to get Henshaw on the radio - I treated that with the contempt it deserved. It would have been an absolute public relations disaster for the city of Liverpool to have the chief exec and Leader kicking each other in public.
"It was clear that Henshaw and McElhinney had their own personal agendas and they were not bothered about what was in Liverpool's best interests."
Storey then recounts how a truce was called and he and Henshaw put on a show of sweetness and light for public consumption.
It was not too last.
Storey says: "Over the issue of the pension deal our relationship deteriorated completely to the point where we did not speak...once David publicly announced his intention to retire our relationship became very frosty."
TO BE CONTINUED...