Paul Wolfowitz lost his battle to hang on

to his job as president of the World Bank yesterday,

announcing his resignation

after a bitter international controversy

However, the Bank's board accepted that

the outgoing leader 'acted in good faith'

Shoeless Paul Wolfowitz will quit

the World Bank on June 30th, the bank announced today

They apparently agreed to pay him

that huge severance package

According to the Board, “blah blah acted ethically

and in good faith blah blah we’ll all miss him etc etc”

Wolfowitz is expected to be replaced

as World Bank President by

either Suze Orman or Shaha Ali Riza,

depending on whether Bush is feeling

like an idiotic or a vindictive child

An angry and bitter Paul Wolfowitz poured abuse and threatened retaliations on senior World Bank staff if his orders for pay rises and promotions for his partner were revealed, according to new details published last night.

Under fire for the lavish package given to Shaha Riza, a World Bank employee and Mr Wolfowitz's girlfriend when he became president, an official investigation into the controversy has found that Mr Wolfowitz broke bank rules and violated his own contract – setting off a struggle between US and European governments over Mr Wolfowitz's future.

Sounding more like a cast member of the Sopranos than an international leader, in testimony by one key witness Mr Wolfowitz declares:

"If they fuck with me or Shaha, I have enough on them to fuck them too."

Paul Wolfowitz lost his battle to hang on to his job as president of the World Bank yesterday, announcing his resignation after a bitter international controversy.

However, he managed to extract a statement from the bank's executive board exonerating him for wrongdoing in engineering a generous pay rise for his partner, Shaha Riza, who is on the staff of the bank.

Controversial, divisive and tainted by Iraq

Paul Wolfowitz has often been blissfully unaware of the full extent of his unpopularity. That was evident recently when he walked into a lift at the World Bank headquarters in Washington with another member of staff.

Making small talk, he asked her the significance of the blue ribbon she was wearing. The employee bravely told him it was being worn by staff seeking his dismissal or resignation. The lift ride continued in silence.

Mr Wolfowitz has been a controversial figure at the bank since his appointment in January 2005.

Some at the bank and representatives of foreign governments, in particular in Europe, were queasy that the bank was to be headed by a leading neo-conservative, one of the main advocates of the Iraq war.

However, there were politicians and officials in Britain, elsewhere in Europe and at the UN who opposed the neo-cons and the Iraq war but spoke highly of Mr Wolfowitz.

Some cited his time as US ambassador to Indonesia, where they say he was both interested in, and active in, development issues. Others had more pragmatic reasons, arguing that it would be better to have someone with influence in the US administration.

But after a honeymoon period when he made speeches and comments about helping the poor that went down well at the bank, he took a series of decisions that alienated those who had been initially sympathetic, or at least neutral.

The trouble began when some senior staff left and he appointed former Bush administration members as advisers, on £125,000 tax-free contracts.

More significant in the longer run was his decision to link aid to anti-corruption measures. His predecessors had done this too but not as forcefully.

The problem for Mr Wolfowitz was that the policy appeared to be applied in a selective way, with aid withheld from countries out of favour with the US and distributed to its allies.

When details emerged about the pay rise his girlfriend Shaha Ali Riza received when he joined the bank, he was open to charges of hypocrisy.

Born in Brooklyn in December 1943, Mr Wolfowitz was brought up in Ithaca, New York, part of a Polish Jewish immmigrant family.

Studying international relations at the University of Chicago, he met leading conservative thinkers. After that he worked almost continuously in government, except during the Clinton years, and gained a reputation for sharp intelligence and 18-hour working days.

As intellectual leader of a bellicose group inside the Bush administration known as the Vulcans, he argued that Iraq could be turned into a beacon of democracy in the Middle East.

Appointed deputy defence secretary by George Bush, he pushed for the invasion, making a series of predictions: that US soldiers would be welcomed as liberators and that Iraq's own oil would pay for reconstruction.

He had personal experience of how wrong his predictions were when he narrowly missed being hit by a mortar attack on a visit to Baghdad.

He was not so lucky at the World Bank. Ewen MacAskill @ Guardian