Mr Gretton, who worked with the band for two decades, is understood to have died from a heart attack on Saturday morning.

The band and Mr Gretton's management company released a joint statement describing their "shock" at his death.

They said: "We are sure that all who have dealt with him as a colleague share with us our feelings that we have a unique and genuine friend.

"His loyalty, generosity and the strength of his principles combined with his love of life will remain an inspiration to us all.

"Our thoughts are with his partner Lesley and children Benedict and Laura at this time."

Two decades of rock

Mr Gretton guided New Order from their early days on the alternative music scene in Manchester to international rock stardom in the 1980s.

He teamed up with the band in their earlier incarnation, Joy Division, in 1978, when they performed a gig at Manchester's Rafters club where he was a DJ.

He and Factory Records boss Tony Wilson bought out their record contract with RCA and Joy Division built up a strong underground following.

Mr Gretton continued with the group after lead singer Ian Curtis committed suicide in May 1980.

The new line-up, renamed New Order, went on to mainstream success in 1983 with Blue Monday, the biggest selling 12-inch record of all time.

They hit number one in 1990 with World In Motion, the England's official World Cup song recorded with the England football squad.

After a five-year hiatus New Order - singer Bernard Sumner, bassist Peter Hook, keyboard player Gillian Gilbert and drummer Stephen Morris - performed together again last year at the Reading Festival. This year they are due back to the studio to make their first album in six years.

A betting man

Mr Gretton was known for the bets he would place with colleagues on the success of the band's singles.

In 1988 he lost £1,000 to the band after betting that their single Fine Time would go top ten, when it peaked at number 11.

The following year Wilson resigned as chairman of Factory temporarily over a bet with Mr Gretton that the single Round And Round would be top five, when it only reached number 21.

Factory went bankrupt in 1992 and the band members have since been concentrating on solo projects.

Oasis songwriter and fellow Manchester musician Noel Gallagher paid tribute to Mr Gretton at an awards ceremony on Monday, dedicating a toast at the Loaded Carling Good Work Fella Awards 1999 in London to his memory.