Bank Investigates Contracts Linked to Wolfowitz

Paul Wolfowitz's grip on his job as president of the World Bank was shaken yesterday after the bank's governing council declared it had "great concern" and ordered an investigation into the contracts of staff connected to him.

After an emergency meeting, the bank's executive directors set up a wide-ranging inquiry into alleged breaches of the bank's code of conduct and ethical rules, and into statements about the controversy made by Mr Wolfowitz's office.

The decision increases the pressure on Mr Wolfowitz, since the board's move widens the investigation to include the employment contracts of two of Mr Wolfowitz's advisers. Robin Kellems and Robin Cleveland moved from working for the Bush administration to the World Bank alongside Mr Wolfowitz in 2005, and have formed part of his inner circle, leading to accusations by bank staff members of special treatment.

The investigation will also look into the revelations that Shaha Riza, a bank employee and Mr Wolfowitz's girlfriend, was given a large pay rise and promotion on his orders when she was seconded outside the bank to avoid rules barring employees in a relationship from working together.

Mr Kellems and Ms Cleveland are also thought to have received open-ended contracts with salaries substantially above their level of experience. They are said to have started on $250,000 (about £125,000) net of tax.

The bank's board said it would establish a working party "to consider immediately the arrangements made for the secondment of the staff member closely associated with the president" - a reference to Ms Riza. "In addition, the executive directors identified other issues that will need to be addressed, including the various public communications made by the bank on the matter and issues around employment contracts made in the office of the president," the statement concluded.

White House support for Mr Wolfowitz has been ebbing in recent days.