The news came as the scandal entangling Wolfowitz claimed its first victim earlier in the day when one of his senior aides resigned.

"Given the current environment surrounding the leadership of the World Bank Group, it is very difficult to be effective in helping to advance the mission of the institution," Kevin Kellems told AFP.

According to The New York Times, the panel of seven of the bank's 24 board members has formally notified Wolfowitz, the former US deputy secretary of defense, of its findings, a move that is likely to add to the weeks of pressure on him to resign.

The committee continued to mull what punishment to recommend, the Times said late Monday.

But it reported that most board members want Wolfowitz, whose management style and determination to uproot some of the bank's bureaucratic practices has upset many staff, to step down.

"The seven-member committee did not make its report public, but a bank official with ties to the panel said that Wolfowitz was given only a day or two to respond," The Los Angeles Times said, adding: "The maneuver seemed designed to force him to step down quickly, thus avoiding further public action in the bruising controversy."

In Brussels, Dutch Finance Minister Wouter said Tuesday that a conflict of interest charge would boost pressure on the embattled World Bank president to resign.

Asked as he arrived for a meeting of EU finance ministers if pressure was mounting on Wolfowitz to resign, Bos told reporters "yes", but added that "it's the board (of the bank) that has to take a decision."

Last week Wolfowitz rejected criticism that he oversaw an improper pay and promotion deal for his partner.

In a letter released Thursday he said that he had acted within World Bank rules in requesting the pay hikes and promotions worth nearly 200,000 dollars for his companion Shaha Riza, who also worked at the international development lender.

Bank managers are not allowed to supervise employees with whom they have such a close relationship.

"It is grossly unfair and wrong to suggest that I intended to mislead anyone, and I urge the committee to reject the allegation that I lack credibility," Wolfowitz said in a letter to the investigatory panel.

The controversy has threatened to hobble the bank's lending and development programs, as well as an anti-corruption campaign targeting borrowers that was Wolfowitz's signature initiative.

"There's a real danger because of this Wolfowitz stuff that donors are going to find a reason not to give," Elizabeth Stuart, senior policy adviser for Oxfam International, told The Washington Post.

Some saw Kellems' stepping down as possibly an effort to blunt the attack and save his boss's job.

The director of strategy and a close adviser to Wolfowitz, Kellems said he was leaving for "other opportunities."

A former journalist, Kellems was tapped for the World Bank post after Wolfowitz, architect of the Iraq war, took the helm of the international financial institution in June 2005.

The men had worked together in the Defense Department when Wolfowitz was deputy secretary during President George W. Bush's first term.

Kellems joined the Pentagon in August 2001 and left to become the spokesman for Vice President Dick Cheney at the White House.

One of Kellems's statements has been key to the international scandal.

Questioned by reporters, he insisted the salary raises awarded to Riza on Wolfowitz's orders had been approved by the bank's board of directors.

But the directors denied they were informed of her promotion and said they had not approved it. They then turned the matter over to the ethics panel to investigate whether Wolfowitz had violated bank rules.

Opponents of Wolfowitz have regularly pointed to Kellems as symbolic of a cloistered leadership that is too centralized and authoritarian.

In this light, Kellems's departure could be interpreted as representing the former Pentagon hawk's willingness to acknowledge the criticism in the hope of assuring his own political survival.