Endgame emerges as Wolfowitz fights to stay on at World Bank

Paul Wolfowitz's fight to save his job is set to continue until at least early next week. Notwithstanding repeated declarations of support from the White House, intense diplomatic manoeuvring between the US and Europe still seems likely to end with the departure of the beleaguered World Bank president.

In a small concession, the bank's executive board has extended until tonight its deadline for Mr Wolfowitz to explain himself, after a special committee found that he had violated ethics rules by arranging a promotion and big pay rise for his partner Shaha Riza when she moved from the bank to the State Department in 2005.

He will then have the opportunity to address the board in person before a final decision is made. The choices lie between a reprimand - the mildest punishment - a vote of no confidence, or outright dismissal. This third, and harshest, option still appeared unlikely last night, despite the intense hostility to the former deputy defence secretary from many board members.

European countries led by Germany, which currently chairs the bank board, may be pressing hardest for Mr Wolfowitz to step down but they do not want a head-on confrontation with the Bush administration. This would inevitably re-open scars left by the Iraq war, of which the World Bank chief was an important architect.

It would also risk upsetting the long-standing informal agreement that while the US chooses the president of the bank, a European heads its sister organisation, the International Monetary Fund. It had been understood that in return for Mr Wolfowitz going, Mr Bush would able to choose his successor.

Karin Kortmann, a state secretary at the German development ministry, confirmed this week that her government had asked Mr Wolfowitz to step down "for the good of the Bank". But she added that her government was trying to avoid a showdown with the US, and that it would be hard to secure a solution to the crisis that Washington opposed.

Indeed, in recent days, backing for Mr Wolfowitz from the White House has seemed to strengthen.

On Wednesday, Tony Snow, Mr Bush's spokes-man, said the President "fully supported" him, while Condoleezza Rice, the Secretary of State, is said to have strongly lobbied for him among European colleagues. But the pressures from within and without the Bank only continue to grow.

Harry Reid, the Senate majority leader, heads a group of senior Democrats on Capitol Hill who have written to Mr Bush, urging, "decisive action to bring this crisis to a close," and avoid further damage to both the bank and US interests there. Democrat candidates for the White House - among them John Edwards, the party's 2004 vice-Presidential nominee - have also sent the same message.

But the Bush administration remains impervious: not just the President but also Henry Paulson, Secretary of the Treasury, who directly oversees US policy on the World Bank. To counter the pressure from Europe, Washington is seeking to mobilise Asian and African countries represented on the Bank's board, as well as allies sympathetic to Mr Wolfowitz, among them Canada.

None the less, almost every day brings some leak from his foes to discredit him, aimed either at casting his crusade against corruption in a hypocritical light, or hinting at other improprieties in his dealings on behalf of Ms Riza.

At the bank, opposition is well nigh unanimous, and does not seem to have been allayed by the resignation of Kevin Kellems, one of the retainers Mr Wolfowitz brought with him from the Bush administration.

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