Bank chief faces sack for giving lover a rise

His contrition over the affair failed to stem criticism that he had abused his power.

With the world's top finance ministers in Washington for a summit, the scandal is a huge embarrassment to the U.S.

Mr Wolfowitz has admitted ordering the bank's personnel chief to give his Oxford-educated lover a job at the U.S. State Department that gave her a more than £30,000 rise to nearly £100,000 a year.

At the bank's Washington headquarters Mr Wolfowitz apologised to staff and admitted making "a mistake".

But the fate of the former deputy defence secretary, one of the chief architects of the Iraq invasion, is likely to hang in the balance while the bank's board of directors decide whether he can keep his job.

Mr Wolfowitz says he intervened to help Shaha Riza, the divorcee he has dated since his divorce, secure a job outside the bank to avoid a conflict of interest.

Miss Riza, who carries a British passport but was born in Tunisia and is of Saudi and Libyan descent, was employed at the World Bank when he became its president two years ago.

He told staff the affair had been "very painful" for him.

He made a plea for "understanding" and confessed he had poorly handled a personal dilemma he faced at a time when he was new to the bank and "trying to navigate in uncharted waters".

Asked whether he would resign, he said he would "accept any remedies" the board decided.

Alison Cave, chairman of the bank's staff association, said Mr Wolfowitz must "act honourably and resign".

She said the bank boss had "broken the staff's trust on this and many other issues" and if the board failed to ask him to step down, the staff would call a vote of no confidence in him.

The White House last night reiterated its support for the beleaguered bank chief.