Oliver Tait, Darley's chief operating officer, has resigned from the board of the Breeders' Cup because of its backflip on the use of the diuretic Lasix.
"The Breeders' Cup has reversed its previously agreed and stated position that the 2013 Breeders' Cup World Championships will be conducted without Lasix," Tait said in a statement from Darley.
"As a consequence, I have resigned from the board of the Breeders' Cup."
The anti-bleeding medication Lasix, also known as Salix, is banned as a raceday treatment in most countries but is widely used in the United States, usually about four hours before a horse competes.
The Breeders Cup board voted last week not to expand its prohibition of Salix to all races at the meeting, but opted to continue the 2012 policy of banning it in the juvenile races.
"Sheikh Mohammed, Darley's principal, has been one of the biggest players in American racing for the last 30 years," Tait said.
"His vision for the sport in America is a future where racing is enjoyed and admired by a new generation of participants and enthusiasts. A true world championship, to be enjoyed and admired by all, needs to be medication-free.
"Progress is being made in all sports around the world in relation to drugs. This is not progress.
"The Breeders' Cup is a leader of this sport, and I was extremely proud to serve on its board. Having rightly and boldly chosen to lead the way on the issue of drugs in racing in 2011, it has now stepped back in time."
Those against the use of Lasix believe it helps retain infirmities in the gene pool. A major concern for racing authorities is that the drug can mask performance enhancing substances, including steroids.