IMF leadership battle begins as chief resigns

US: The resignation of International Monetary Fund head Dominique Strauss-Kahn promises to set off a succession battle to lead the global lender pitting the developing world against the West.

Five days after Strauss-Kahn was arrested for allegedly sexually assaulting a maid in a posh New York hotel, the Fund, a crucial player in protecting global economic stability, has given no suggestion of what it will do.

But possible candidates have been mentioned and a fight looms over whether the next chief will come, as tradition has dictated, from Europe, or from one of the rapidly developing economies flexing their muscles on the world stage.

As pressure swelled for the IMF to chart its course through the crisis, Strauss-Kahn announced early Thursday that he would step down as he again denied all the charges against him.

He did not give any indication of who he wanted to succeed him, saying only that he wanted "to protect this institution which I have served with honour and devotion."

The IMF itself has said little about the crisis and continued its work under acting director John Lipsky, signing off this week on a 78-billion-euro ($111 billion) Portugal bailout, releasing funds for Ireland's bailout, and putting pressure on Pakistan to improve its fiscal management.

"The Fund will communicate in the near future on the Executive Board's process of selecting a new Managing Director. Meanwhile, Mr. John Lipsky remains Acting Managing Director," the IMF said in a short statement accompanying Strauss-Kahn's resignation letter.

Officially, the 24-member executive board votes to fill the top post, with votes weighted based on member countries' and region's subscription quotas.

But traditionally it has been negotiated based on a pact that gives the United States a hold on the World Bank's top job and Europe the IMF position.

Some European leaders have already called for another European to be named, with French finance minister Christine Lagarde and former German central banker Axel Weber mentioned as possible candidates.

The popular shortlist from emerging economies includes Turkish former UN official Kemal Dervis, Indian planner and IMF veteran Montek Singh Ahluwalia, and Mexican central banker Agustin Carstens. Washington, AFP