Wolfowitz Statement Expected Soon

Paul Wolfowitz is preparing to jump before he is pushed out of his job as president of the World Bank, according to sources inside the bank, bringing to an end a controversy that first erupted nearly six weeks ago.

Rumours about Mr Wolfowitz buzzed throughout Washington during the day, gaining increasing strength as leaks from within the World Bank's executive board meeting filtered out, with one bank official saying: "We just want this to be over."

Mr Wolfowitz is deep in discussion with bank officials and members of the US administration, to broker a deal allowing him to step down before the bank's governing board passes a resolution condemning him for ethical violations and directly calling for him to step down.

An announcement on Mr Wolfowitz is likely to be published within the next few hours, sources suggest - although the wrangling over the terms of his departure could delay it. Mr Wolfowitz is demanding the bank publically accept some of the responsibility for the conflicts of interest that he was accused of by an internal investigation.

Mr Wolfowitz's move came after the US government backed away from its support for the embattled president, in the face of increasingly hostile opposition from major European government, including Britian, Germany and Denmark.

Canada, which had previously backed its US allies, dramatically switched camps on Tuesday when the US urged a softer line on Mr Wolfowitz's failings. Once US representitives realised that opposition to Mr Wolfowitz remaining in office remained unbending, the White House prepared to do a u-turn after previously giving its backing to Mr Wolfowitz.

The US called for an adjournment of the executive board meeting in Washington this afternoon to try and find a breakthrough, and the meeting of the 24-member committee later resumed to talk through the details.

One sticking point is said to be the terms Mr Wolfowitz will leave under, the size of his pay-off, and the treatment of his girlfriend Shaha Riza - the woman whose secondment and pay deal was the cause of Mr Wolfowitz's downfall.

Ms Riza worked for the bank before Mr Wolfowitz was appointed by President Bush in June 2005. She was seconded to the US state department to avoid bank rules forbidding those with a romantic involvement from working together. She now works for a foundation based in Washington, but remains on the World Bank's payroll, with a clause in her contract allowing her to return to the bank should Mr Wolfowitz leave.

Her contract was negotiated by Mr Wolfowitz, and the special investigation by a bank panel found that he had witheld details from senior colleagues, including the bank's top legal officer. Mr Wolfowitz claimed that he done everything by the book, but those claims were directly contradicted by bank officials in testimony to the panel.

The panel's findings were released on Monday evening, concluding that the president had violated bank rules and broken the terms of his own contract.

An Oxford-educated British citizen, Ms Riza's salary went from nearly $133,000 to $193,000, thanks to her secondment. The panel concluded that the salary increase she received "at Mr. Wolfowitz's direction was in excess of the range" allowed.