Proposals to radically reform governance at the under-pressure Co-operative Group were unanimously backed at a special general meeting this afternoon.

Following a frequently bitter debate over the direction of the embattled mutual, which claimed the head of former chief executive Euan Sutherland, key reform principles embodied in a review by Lord Myners won 100% backing at the meeting.

The vote creates foundation stones on which it is hoped the Co-op is to be rebuilt following a catastrophic year of scandals, a £2.5bn loss and venomous political infighting.

Co-operative Group chair Ursula Lidbetter said after the vote at the Co-op’s Angel Square headquarters in Manchester: “This is a highly significant moment for the Co-operative Group and I am delighted that our members have made clear their commitment to far-reaching reform of our governance.

“There is a huge task ahead of us if we are to deliver the reforms necessary to restore the group’s reputation and return it to health but the board will work with members to ensure that we seize this opportunity.”

Co-operative Group interim chief executive Richard Pennycook said that now the governance issue was being addressed, he believed the Co-op’s financial health could be restored over a five-year period.

The group is making disposals, such as of its pharmacy arm, which will leave it focused on fewer activities including its food retail division.

Pennycook said: “In five years we have a lot of confidence that the businesses we’re retaining will be restored to health.”

Before the special meeting he told delegates that they had the chance to reinvigorate the business along the lines envisaged by its founders, the ‘Rochdale pioneers’, 150 years ago.

He told them: “Looking back in years to come, when we have restored the pride of the movement and shown that there really is a better way to do business, you will be known as the pioneers of Angel Square.”

The principles backed at the meeting include the creation of a better qualified board, greater powers for the organisation’s 8 million members and provisions to ensure against demutualization of the business.