According to the Times, the panel has formally notified Wolfowitz, the former US deputy secretary of defence, of its findings, a move that is likely to add to weeks of pressure on him to resign.

The committee, made up of seven of the bank's 24 board members, continued to mull what punishment to recommend, according to the New York daily.

 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 resign.

 Last week Wolfowitz, one of the architects of the Iraq war, 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 Shaha Riza, who also worked at the international development lender.

 "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.

 Earlier Monday a top aide to Wolfowitz resigned, saying the controversy surrounding the development lender made it difficult for him to be effective.

 Kevin Kellems, the director of strategy and an adviser to Wolfowitz since June 2005, told AFP he was leaving to pursue other opportunities.

 "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," he said.

Agence France Presse