Rabbi Abraham Levy, spiritual head of the country's oldest Orthodox community, the Spanish and Portuguese Jews' Congregation, is to retire in July when he reaches the age of 73.

He will step down two years before the end of his contract, having led the community since 1980. But he will continue to represent it externally as emeritus spiritual head until a successor is found.

The announcement of his retirement follows a fractious few months within the congregation after splits over the succession.

London-born Rabbi David Bassous, leader of a New Jersey congregation, had been recommended by lay leaders to be spiritual head. But he withdrew in January after the result of a members' ballot to approve the selection was challenged by a group of congregants opposed to him.

Chairman of the executive, Adam Musikant, praised Rabbi Levy's "exemplary leadership" and "careful stewardship". He particularly highlighted his efforts in "bridging the divide between religious and secular, promoting the cohesiveness of Anglo-Jewry through his work in many of its institutions and engaging with wider UK leadership through his interactions with the very highest echelons of British society".

News of the retirement will disappoint some of Rabbi Levy's supporters. In an email to other members last month, Lucien Gubbay, a former president of the congregation's board of elders, claimed Rabbi Levy was being "hounded out of office".

A few weeks ago, a number of members had planned to seek an emergency meeting calling for Rabbi Levy to step down this year, only to back-track.

"In any community, different people can have different views, which they are entitled to debate," Rabbi Levy said. "I feel that this is the right time to retire. It has been my pleasure and privilege to serve the congregation for 50 years.

"I remain willing to help in any way I can in the future and look forward to continuing my educational work with the Montefiore Endowment and the Naima Jewish Preparatory School."

It is understood that Rabbi Levy will be able to buy his Maida Vale home from the congregation - minus the cost of the licence under which the community is obliged to house him locally. The house, valued at £1.5 million in 2008, is said to be now worth more than £2 million.

Elsewhere, the former head of the Sephardi Beth Din in London, Dayan Pinchas Toledano, is to be honoured with the title of Haham by the Portuguese community of Amsterdam in a ceremony on Sunday. Dayan Toledano has served as head of the Dutch Sephardi Beth Din since 1998.