The former Preston boss - who had been in charge since November 2004 - leaves with the Shrews in 16th place in Coca-Cola League Two, despite having been the beaten play-off finalists last season. They are without a win in seven games and were beaten 4-1 at Barnet on Saturday.
Peters said: "The negativity towards me at the moment might be affecting the team and whatever we can do for us to get results we need to do."
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