The head of the main UN agency for Palestinian refugees has resigned after becoming embroiled in a scandal involving accusations of nepotism, abuses of authority and having an affair with an employee.

In a statement on Wednesday, the UN said Pierre Krähenbühl had resigned with immediate effect his from role as commissioner general at the agency after an internal investigation found “management issues.”

Krähenbühl tendered his resignation to UN Secretary General Antonio Guterres on Wednesday amid widespread coverage of the scandal just hours after he had agreed to step aside temporarily earlier in the day.

Preliminary findings “exclude fraud or misappropriation of operational funds” by Krähenbühl, a UN spokesman said separately. “There are, however, managerial issues that need to be addressed.”

The Swiss national has previously strongly denied allegations of impropriety.

A leaked internal investigation into misconduct at UNRWA, completed late last year, accused the agency of “credible and corroborated” allegations of serious ethical abuses, including some involving Krähenbühl.

Announcing Krähenbühl was stepping aside, the UN secretary general’s office said the continuing inquiry had “revealed management issues which relate specifically” to the agency’s head.

UNRWA said he had stepped aside until the completion of the process and the UN secretary general, António Guterres, had appointed Christian Saunders as the officer in charge for the interim period.

Sources said the allegations concerning Krähenbühl involved his relationship with a female member of staff, with whom he flew around the world travelling in business class and staying in boutique hotels.

According to Swiss media reports earlier this year, Krähenbühl, who is married, reportedly created a post for a woman with whom he was allegedly in a relationship. The cost of the role was funded by the Swiss foreign ministry from March 2015 to December last year.

Several donor countries, including Switzerland and Belgium, suspended funding to UNRWA, which provides support to 5.5 million Palestinian refugees, over the allegations.

The alleged misbehaviour at the top of the agency also reportedly involved other senior staff, with some of the complaints allegedly involving attempts to cover up other wrongdoing.

The problems at the agency are believed to have come to light after two dozen senior staff complained to UNRWA’s ethics officer, who completed a report on the allegations for Guterres in December last year.

The report was leaked this summer, apparently at a time of frustration with the slow progress of the UN’s investigation, prompting further revelations.

Although Krähenbühl was regarded as a highly effective advocate for his agency – replacing the shortfall in US funds after Donald Trump cut them – the allegations suggest an organisation riven by discontent.

The leaked investigation depicted an “inner circle” around Krähenbühl who were suggested to have benefited themselves.

They were accused of “engag[ing] in misconduct, nepotism, retaliation ... and other abuses of authority.”

The UNRWA statement said a continuing review by the UN internal oversight office found a number of areas that required strengthening.

The apparent relationship at the heart of the allegations had prompted widespread speculation within the agency, as the two officials had flown around the world together, allegedly sometimes staying in a separate hotel to other staff.

In a statement earlier this year regarding the claims, the agency’s spokeswoman, Tamara Alrifai, said: “There is an ongoing investigation concerning UNRWA, and nothing that is being disseminated or discussed are findings of the investigation, only allegations and rumours.”

She appealed for people to “wait for the actual conclusions” and for donors to “keep their funding in place” for Palestinian refugees.

In early July, Krähenbühl said he “unreservedly” rejected the report’s characterisation of the agency and its senior leadership.

“If the current investigation – once it is completed – were to present findings that require corrective measures or other management actions, I will not and we will not hesitate to take them,” he said.

Israel expressed “great concern” over the findings, saying they confirmed the need for “deep and comprehensive change” at UNRWA.

“The stepping aside of Krähenbühl is but the first step in a long process that is needed to eliminate corruption, increase transparency and prevent politicisation of the agency,” the foreign ministry said.