Paul Wolfowitz’s future hung in the balance last night as the White House admitted that “all options are on the table” about the leadership of the World Bank.

The embattled bank president pleaded before the institution’s full board yesterday to be allowed to keep his job and promised changes in his management style after an ethics committee said that he had broken rules by arranging a generous pay rise for his girlfriend.

It said that Mr Wolfowitz’s actions had produced a “crisis of leadership” and so damaged the bank’s reputation that the 24 shareholder governments must now decide whether he was capable of carrying out the organisation’s mandate to fight global poverty.

Britain is among several countries with sizeable votes on the board that remain reluctant to wield the knife against a close ally of the White House who, in his former job at the Pentagon, was an architect of the Iraq war.

Gordon Brown, the Chancellor, is understood to fear opening up fresh divisions between Europe and the US.

Instead, the Bush Administration — which until now has offered unqualified support for Mr Wolfowitz — appears to be offering all sides a way out.

Henry Paulson, the US Treasury Secretary, has been telephoning finance ministers in at least six countries to suggest separating the allegations from questions about Mr Wolfowitz’s future.

Tony Snow, the White House press secretary, reinforced the message yesterday, saying: “We have faith in Paul Wolfowitz”, and insisting that the charges were not “a firing offence”. He then suggested that after the allegations had been resolved, it would be appropriate to consider whether Mr Wolfowitz could remain as bank president.

“Separately, at some point in the future there are going to be conversations about the proper stewardship of the World Bank,” Mr Snow said. “In that sense, all options are on the table.”

It is believed that Mr Paulson has spoken to Hilary Benn, the British International Development Secretary, who has been vocal in expressing dismay at the damage being done to the bank and has criticised Mr Wolfowitz’s emphasis on anti-corruption policies. British sources suggested yesterday that the Government, along with those of other European countries, did not believe that the two issues could be separated.

A British official told The Times: “We are at a very delicate stage and we will be reserving our position in public and, if possible, in private as well.”

Since the bank’s foundation in 1944, no board has dismissed a president, and there is no precedent for how to proceed. After its closed-door meeting with Mr Wolfowitz, the board must decide whether to vote for his dismissal, pass a no-confidence motion, discipline him or take no action.

America, the board’s largest shareholder, is thought to have the support of Japan in keeping Mr Wolfowitz. But the Europeans and Canada would be able to outvote them.

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