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Shuji Kajiyama, Associated Press
Former President and Chief Executive of Olympus Corp. Michael Woodford speaks to reporters after a press conference at the National Press Club of Japan in Tokyo, Friday, Jan. 6, 2012. Woodford, who blew the whistle on dubious spending at the Japanese camera and medical equipment maker, said Friday he is giving up his fight to regain the presidency.

TOKYO — The former Olympus Corp. CEO who blew the whistle on dubious spending at the Japanese camera and medical equipment maker said Friday he is giving up his fight to regain the presidency and plans to sue the company.

Michael Woodford said he decided to drop his bid when he realized he didn't have the support of Japanese instituational investors, whom he blamed for tacitly allowing the current board to stay on despite acknowledging a massive cover-up.

"Despite one of the biggest scandals in history, Japanese institutional investors have not spoken one single word of criticism, in complete and utter contrast to overseas shareholders who are demanding accountability from directors," Woodford told a news conference at the Japan National Press Club in Tokyo.

"Even if I win, do I want to come back" to such a situation, the 51-year-old Briton asked.

Woodford also said he planned to sue for wrongful dismissal. "I will most definitely be suing Olympus," he said.

In October, Woodford confronted Olympus management about the excessive spending on questionable acquisitions and fees paid to an obscure Wall Street firm, which later proved to be part of the cover-up. He was quickly fired as president.

An independent panel found that the deception at Olympus dated to the 1990s, and involved an elaborate scheme to hide 117.7 billion yen ($1.5 billion) in investment losses. The company had initially denied any wrongdoing.

After that, Woodford mounted a campaign for a comeback at Olympus, saying the company needed a new board of directors, mostly outsiders, to make a fresh start, ensure transparency and leave the scandal behind.

The fight between Woodford and Olympus management would have come to a head at the next shareholders meeting, the date of which had not been set.

In an interview with The Associated Press last month, Woodford sounded upbeat about gaining support for his comeback, with support from non-Japanese investors as well as the Japanese public.

But in recent weeks, Woodford said he realized he could not overcome the resistance of insitutional investors, such as Olympus' main creditor bank Sumitomo Mitsui Banking Corp.

Even if he had won the proxy fight, there would have been a "fracture" between the overseas shareholders and the Japanese institutional shareholders, he said.

Sumitomo Mitsui and Olympus had no immediate comment.

Woodford said the scandal was possible because of the system of cross-shareholdings at old-style Japanese companies, in which big-name companies hold stakes in each other to ensure stability. That system also works to maintain the status quo.

Japan "will go into terminal decline if this cross-shareholding system allows these things to happen," he said, urging Japanese politicians to draw up legislation that would eliminate this system.

He said the scandal at Olympus comes across to the rest of the world as "an Alice in Wonderland, bizarre situation. I get fired and lose my job for doing the right thing. And (the directors) are still there."

Woodford, a 30-year employee at Olympus, said some good had come of his effort by drawing attention to what he called a corporate culture that encouraged "yes-men" and weak corporate governance.

Japanese government officials have defended the country's corporate governance record, with Industry Minister Yukio Edano saying that it was on par or even better than that of the U.S. Edano didn't elaborate, but notable accounting scandals in the U.S. include those at Enron and WorldCom.

Woodford said his fight had not been about an outsider fighting Japanese, but about someone who wanted reform versus those who had resisted it. Woodford said he liked Japan, and will visit often.

"So many individuals have come up to me to tell me that what I was doing was the right thing," he said in a statement.

Associated Press writer Yuri Kageyama contributed to this report.