The White House has said it will move quickly to nominate a new president of the World Bank, following the decision of Paul Wolfowitz to resign at the end of next month after a bruising scandal over payments to his girlfriend, writes Denis Stauntonin Washington.
Mr Wolfowitz gave up the fight to keep his job after the bank's board agreed to issue a statement sharing the blame for the generous pay deal to bank employee Shaha Riza between the president and an internal ethics committee.
A bank panel this week found the former US deputy defence secretary guilty of breaking internal rules by negotiating a 36 per cent pay rise for Ms Riza when she was moved to the department of state.
"He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution, and we accept that. We also accept that others involved acted ethically and in good faith," said the board's directors in a statement issued on Thursday night.
Mr Wolfowitz, whose refusal to leave his post caused a staff rebellion at the bank, said it was now important to focus on the institution's role of providing loans and grants to the world's poor.
"Now it is necessary to find a way to move forward. To do that I have concluded that it is in the best interests of those whom this institution serves for that mission to be carried forward under new leadership," he said.
White House spokesman Tony Fratto said that the president, George Bush, regretted that Mr Wolfowitz, a close ally in the run-up to the Iraq war, had to go. The US traditionally chooses the bank's president and Mr Fratto said the administration would move without delay to find a replacement.