Rangers announced that the man who led Rangers to 10 titles had stepped down from the board with immediate effect - three days after the return of Charles Green as a consultant.
Smith's departure leaves manager Ally McCoist even more vulnerable following his stinging attack on the character of Green after his side's League Cup exit at Forfar on Saturday, which came hours after the former chief executive warned McCoist would have a "problem" if he did not win a cup this season.
And Rangers fans want the club to act quickly to facilitate a meeting of shareholders to discuss the latest request for boardroom change.
A joint statement read: "The Rangers Supporters Association, Rangers Supporters Assembly and the Rangers Supporters Trust are extremely concerned with current events at our club.
"Walter Smith's resignation is a matter of deep anxiety and we trust that Walter will give supporters a detailed statement outlining his reasons for leaving. The recent request for an EGM (Extraordinary general meeting) to replace key personnel would suggest our concerns are shared by other significant shareholders.
"We would therefore urge the board of Rangers Football Club to agree to allow the EGM to proceed as soon as possible to enable the thousands of fans who have invested in the club to hear all sides in an open forum.
"In the meantime, we have requested an urgent meeting with the chief executive in order to keep our members as informed as possible."
The chief executive, Craig Mather, soon released his own statement implying that he and Smith remained on good terms.
Mather, who replaced Green in April, said: "I am saddened that Walter felt he had to leave the board because his advice and common sense approach over the past few months have helped enormously. Walter has his own reasons for this decision but exactly when he discloses them to everyone is up to him.
"I am certain the last thing he would want to do is damage the club more than is necessary. After all, he returned to Ibrox to help rebuild the club, not to disrupt that process. However, I have to accept his decision and respect it. But even though he has stepped down he has made it clear that if I feel the need I can call him at any time.
"I want to assure everyone, fans and investors, that I am absolutely committed to continuing the work that is well under way. The board are totally united on that front. A man I respect has left the club but I have a duty to ensure we remain on the right track.
"There is no doubt in my mind we will overcome any obstacles placed before us but I do fully understand the concerns of the Rangers fans."
Smith joined the board in November last year in what was a huge coup for Green, who had rejected a bid from a consortium led by the former Rangers manager immediately after buying the liquidation-bound Ibrox club's assets and business in June.
Smith was elevated to chairman in May following the departure of Malcolm Murray, a month after Green quit amid an investigation into his links with former Rangers owner Craig Whyte, although he denied any wrongdoing.
However, the tension and split at the heart of power which was once defined through Murray and Green's fractious relationship continued to simmer under the surface until a group of disgruntled shareholders launched a bid for boardroom power last week.
Rangers announced on Friday that a group of shareholders had made an official request for the removal of Mather along with Brian Stockbridge and Bryan Smart, two of Green's associates.
The requisition called for the appointment of Paul Murray, a director of the oldco Rangers before Whyte's takeover, whose Blue Knights consortium lost out to Green's group in their bid to take control at Ibrox.
It also called for former PricewaterhouseCoopers Scotland executive chairman Frank Blin to join the board. The group are believed to hold approximately 30 per cent of shares in Rangers but are hopeful of persuading enough institutional shareholders and supporters to back their bid.
Rangers had 21 days to respond to the requisition and would have another 21 days to constitute an extraordinary general meeting to vote on the request if they deemed it viable. Smith's departure is the latest in a number of changes in the corridors of power in recent months.
After Phil Cartmell left the board along with Malcolm Murray, Greenock-based businessman James Easdale joined and Rangers changed their nominated adviser and broker from Cenkos Securities to Strand Hanson.
On Monday they announced the additional appointment of Daniel Stewart & Company plc as corporate broker with Strand Hanson remaining as nominated advisor. But the departure of Smith is by far the most concerning exit for Rangers supporters, who were comforted by his presence in the boardroom.
The board now consists of five men - Mather, Stockbridge, Smart, Easdale and Ian Hart, a Rangers supporter who had previously donated money to the Murray Park academy. McCoist described his mentor Smith as the "glue" that was holding Rangers together and his resignation adds to supporters' fears that their club may be torn apart again.
- Sports & Recreation
- Rangers Football Club
- Walter Smith
- Rangers Supporters Trust