The company, whose advertising is synonymous with its hippo and duck characters, has put its £2 million creative account out to pitch.
MWO said it had resigned the business because of confusion over the future of Silentnight's advertising. It claimed a lack of clarity over Silentnight's requirements had led to the creation of a large amount of creative work that failed to run.
The company said the agency had served it well but had struggled to produce the latest campaign.
MWO was awarded the account in May 2000 after a four-way pitch, with a brief to return the Silentnight brand to TV after an eight-year absence. The following year, it brought back the hippo and duck, created by Manchester's BDH\TBWA in 1987, but as cartoon characters.
The advertising was aimed at giving Silentnight a higher degree of warmth and personality following a revamp of the company's logo and brand identity to create a more consistent image.