Gary Smith has quit his player-coach role at Cowdenbeath after claiming the club had reneged on a deal to make him their new manager.
The Second Division club gave the job to Brian Welsh on Monday.
"I received a phone call from the chairman offering me the job," Smith told the Daily Record.
"One of the conditions was that Brian was to be my assistant so I asked for two days to think it over. When I accepted I was told Brian was manager."
Smith left Hibs at the end of last season to join up with then manager Mixu Paatelainen at Central Park.
But Paatelainen left the club for a post in his native Finland last month.
"It was clear I'd need to leave as it would have been embarrassing to be sitting in the same dressing room as Brian as manager as we both knew what happened," added Smith.
Cowdenbeath chairman Gordon McDougall, who is Welsh's father-in-law, said: "There are elements of truth to what Gary is saying.
"But it would be wrong for me to go into chapter and verse over what happened."