The decision for resignation matured after the great parade. It may have been a considerable psychological blow to Mannerheim that the Senate, now under German influence, was not so enthusiastic about Mannerheim’s St Petersburg plan. Neither had the speech he had made in the parade on behalf of the army, met with as favourable a response as he had hoped for. It is nearly impossible to know whether Mannerheim himself believed he was forced to resign. He may only have meant to pressure the Senate to back him up.

Svinhufvud sent the Commander of the Baltic Division, von der Goltz, a letter, in which the Germans were requested to stay in the country. Goltz informed Svinhufvud that the Germans had completed a plan, concerning the organization of the Finnish army. German officers could be deployed on one condition: they should be positioned in the army in concurrence with the war leaders of Germany, and the Finnish army should recruit officers only from Germany and its allies. Consequently, the Swedish officers should resign on grounds of the diversity of officer training.

On the 23rd of May, the Senate put forward to Mannerheim a proposal which was based on the views of von der Goltz, and which, among other things, called for the establishment of War Ministry; the Minister of War would be considered equal to the Commander-in-Chief. The head of the state would appoint the minister. Mannerheim was offered the task of organizing the army according to the German plan. German officers would be employed as trainers and consultants, whenever necessary. He was asked for a suggestion, concerning the size, equipment, arms and budget of the army, which factors, however, would depend on the resources available. The right of appointment, promotion and rewarding of the officers would be left to the Commander-in-Chief until further notice. Military operations would only be continued in mutual understanding with the Germans, and assistance to Russian monarchists would depend on the attitude of the German leaders.

To the great astonishment of the Senate, Mannerheim did not go along with this proposal unconditionally. If he were to stay, he would want total independence from the Senate and the Minister of War in all military matters. The Minister of War should only be an administrative authority, a civilian would do as well. The decision of how and where the Germans would be posted should be left to him only. No negotiations with the subordinates, and in military matters with foreigners, behind his back were to be allowed. At this point, senator Frey informed Mannerheim that the Senate had already tied their hands by inviting officers from Germany according to the list composed by the Germans.

It is true that Mannerheim was willing to use the German model and the know-how of the German officers in the organization of the army, but he was afraid that the Germans would gain too much control over the Finnish army and matters of foreign policy: he does not "want us to throw ourselves on the arms of the Germans" or "to end up as puppets in the hands of Germans". In discussions on foreign policy and the St Petersburg expedition, the disagreement became all the more clear. Mannerheim warned the Senate of a direct attack to eastern Karelia and emphasized the advantages of assisting the monarchists in St Petersburg. The senators, on their turn, warned him not to trust the Russians’ promises concerning eastern Karelia.

The resignation remained valid. When the appointment of the Minister of War was being considered, Mannerheim informed the Senate on 27 May that to his mind Lieutenant Colonel Thesleff should not be appointed Minister of War. When Mannerheim thus "froze" Thesleff the Germans regarded it as a deliberate insult to the friends of Germany from his part: "After this it is impossible for us to act for the benefit of Mannerheim". As regards the minimum conditions laid down by Mannerheim, the German general informed Svinhufvud on 27 May that it was totally impossible to subordinate the German officers to Swedish officers, that the number of German officers in the plan should not be diminished, and that using and positioning them freely would be out of question.

Mannerheim signed his final resignation to Svinhufvud: "The sole reason for my resignation is that, in the negotiations which I have had the honour to carry on with you and the members of the Senate, I have had the chance to convince myself that the government is not willing to give the military high command opportunities, which would allow me to take responsibility when settling important questions of the future."

The Senate’s decision was easy. German aid could not be given up, so Mannerheim would have to go. On the evening of the 27th of May Svinhufvud appointed the new senators, and Thesleff Minister of War. Some of the senators would have liked to see a German general as the Commander-in-Chief of the army, but the majority supported an officer of Finnish nationality. On the evening of the 29th of May Svinhufvud, the Regent at the time, accepted Mannerheim’s resignation, and appointed a Finnish-speaking Major General, the commander of the eastern army and the occupier of Viipuri, K.F. Wilkman (later Vilkama) Commander-in-Chief. On 1 June, Mannerheim boarded a train at Helsinki railway station to leave for Sweden via Turku.

The reasons for the decisions the Senate and the Germans made are clear-cut. The Germans in Finland wanted to secure the objectives of the German army and suspected Mannerheim’s motives. The Independence Senate wanted to make sure that there would be no complications on the way of the German support, particularly in questions of foreign policy.