Paul Wolfowitz is mired in a scandal regarding payments to his girlfriend

Kevin Kellems said an ongoing scandal surrounding his boss made it difficult for him to remain effective in his role at the Washington-based institution.

Mr Wolfowitz has been mired in a controversy involving his handling of a pay package for his girlfriend.

Mr Kellems, who had also worked with Mr Wolfowitz at the Pentagon, is expected to leave his post next week.

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

"I have tremendous respect and admiration for the Bank staff and management," he added.

Conflict of interest

Mr Kellems' sudden departure comes at a critical point in the investigation into whether Mr Wolfowitz acted properly over the authorisation of his girlfriend's promotion and pay increase in 2005.

The lingering controversy over the potential conflict of interest involving Shaha Riza, who is on the payroll of the World Bank, has prompted a growing chorus of voices calling for his resignation.

Critics argue the scandal is damaging the credibility of the global lender, amid a recently launched anti-corruption campaign.

Kevin is known among his colleagues for his emphasis on team-building and mentoring

Marwan Muasher, World Bank

A special World Bank panel of directors has been looking into whether Mr Wolfowitz abused his powers and is expected to report its findings imminently to the wider 24-member board.

The Bank's shareholder governments will then decide on the president's fate.

The committee is also believed to be examining other controversial employment arrangements amid claims Mr Wolfowitz gave senior posts to trusted former colleagues, who did not have much relevant experience.

Mr Kellems was an adviser to the World Bank boss when he was Deputy Defence Secretary in the Bush administration and supported him in the run-up to the Iraq war.

"Kevin is known among his colleagues for his emphasis on team-building and mentoring, and for his work ethic and grace under pressure," said Marwan Muasher, senior vice president, external affairs at the World Bank.

"My colleagues and I enjoyed working with him and will miss him."