Britain’s representative on the board of the World Bank, one of Gordon Brown’s closest advisers, admitted yesterday that he is romantically involved with a bank employee, but denied an allegation that he used his influence to get her preferential treatment.

Tom Scholar, part of the 24-member board that finalised the deal last night that ended Paul Wolfowitz’s presidency of the World Bank after he awarded his girlfriend a lavish payrise, conceded that he, too, had a “partner” at the bank. However, unlike Mr Wolfowitz, he said, he had broken none of the institution’s conflict-of-interest rules.

Mr Scholar, 38, a former private secretary to Mr Brown and tipped to become his Downing Street chief of staff when the Chancellor becomes Prime Minister, issued a statement after a 1,000-word, highly critical column entitled “World Bank Scholar” appeared in yesterday’s Wall Street Journal.

The article quoted anonymous e-mails, purportedly from a World Bank employee, alleging that Mr Scholar, like Mr Wolfowitz, has a girlfriend at the bank, but had never officially disclosed the fact.

One e-mail, which the Wall Street Journal article claimed had been sent directly to eight members of the Bank’s board on Tuesday, and signed “John Smith”, allegedly stated: “Mr Scholar has used his privileged position. . . to influence Bank staff to manipulate [name withheld]’s job description in a way to suit her limited professional qualification. Without Mr Scholar’s intervention she would clearly not occupy her present position.”

In his statement, Mr Scholar rejected the allegation.

He said: “I comply fully with the board’s code of conduct and the relevant World Bank staff rules, including staff rule 3.01 (standard of professional conduct). There is no conflict of interest.

“As an executive director, representing my government at the World Bank, rather than a member of staff or management, I do not have any supervisory responsibility for bank staff, beyond the five in my immediate office. I am not the supervisor of my partner, either directly or indirectly. We have never come into professional contact, and I have made arrangements to avoid any possibility of professional contact. Since I am not a member of staff or management, I could never be involved in any individual personnel decision affecting her. And I have never discussed or made reference to any such issue with anyone who could possibly be involved.”

On Monday a bank ethics panel found Mr Wolfowitz guilty of breaking the institution’s code of conduct and conflict-of-interest rules after it emerged that he dictated the terms of a $50,000-a-year, tax-free pay rise for his British-born girlfriend, Shaha Riza, when she moved from the World Bank to the State Department after Mr Wolfowitz took over at the institution in 2005.

Ms Riza had to move because under bank rules, spouses or domestic partners cannot supervise one another, or be given jobs that bring them into routine professional contact. As president, Mr Wolfowitz is in essence a supervisor of all employees.

The bank, created in 1945 to rebuild Europe after the Second World War, provides more than $20 billion a year for projects, for example in health and education. Its centrepiece programme offers interest-free loans to the poorest countries. By tradition, an American has run the bank. A European heads its sister agency, the International Monetary Fund.

The United States wants to keep that decades-old tradition intact. But critics say that the process is outmoded and should be changed.

James Steinberg, a deputy national security adviser for President Clinton, argued yesterday that Washington would not necessarily lose much global influence by accepting a nonAmerican as president of the World Bank.

As long as Mr Wolfowitz’s successor “could work well with the United States, the fact of it being an American is far less important . . . We need someone who shares basic views of development with the US,” Mr Steinberg said.

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