Wolfowitz refuses to resign

Washington: World Bank President Paul Wolfowitz refused on Wednesday to bow to heavy European pressure to resign as he sought to clear his name in negotiations with the bank's board over a possible exit strategy.

"Mr. Wolfowitz will not resign under this cloud and he will rather put this matter to a full (board) vote than to capitulate on his integrity," his lawyer Robert Bennett told Reuters.

Several European countries have said Wolfowitz should step down to salvage the bank's credibility, which they say has been damaged by his handling of a high-paying promotion for his companion, bank Middle East expert Shaha Riza.

The controversial former deputy US defence secretary and architect of the Iraq war has insisted he acted in good faith on the advice of a board ethics committee in overseeing the promotion of Riza and has said he wants it to acknowledge its own failures.

A board panel found his efforts on her behalf broke bank rules and represented a conflict of interest.

Board sources said talks were launched on Wednesday over how to push the dispute to a close. Some members have suggested a resolution that would recognize the panel's findings and Wolfowitz's efforts to resolve the conflict of interest issues over Riza, but also acknowledge mistakes by the board.

However, the board adjourned until Thursday without a decision.