Hours before Barack Obama was scheduled to arrive in Washington tonight for a final fortnight of preparations before taking office, his choice as commerce secretary abruptly announced he was withdrawing his name.

Bill Richardson, the New Mexico Governor, said that a pending investigation into a company that has done business with his state “would have forced an untenable delay in the confirmation process” – even though he had done nothing wrong.

Last month a federal grand jury was reported to be investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in American history, secured similar contracts worth $1.5 million from New Mexico.

Specifically it is said to examining donations of $100,000 from California-based CDR Financial Products to Mr Richardson’s efforts to register voters and pay for expenses at the Democratic National Convention in 2004.

"Let me say unequivocally that I and my Administration have acted properly in all matters and that this investigation will bear out that fact," Mr Richardson told NBC.

"But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process." Mr Richardson said he would continue as Governor of New Mexico.

According to NBC, Mr Obama accepted the decision by Mr Richardson, a former rival for the Democratic nomination and the most prominent Hispanic politician in America, with “deep regret”.

"Governor Richardson is an outstanding public servant and would have brought to the job of Commerce Secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Mr Obama said.

The President-elect added that "we must move quickly to fill the void left by Governor Richardson's decision".

Mr Obama's handling of the transfer of power has been widely admired with polls showing more than four-fifths of American voters approve of their new president.

But even before he takes office, events - ranging from a burgeoning economic crisis to Israel’s invasion of Gaza and including the embarrassing sideshow over filling his former seat in the Senate - are threatening to throw him off-course.

Mr Obama is expected to begin talks with Congressional leaders tomorrow about a proposed economic stimulus package costing at least $775 billion which is designed to create 3 million jobs.

In a weekend video address, the President-elect urged politicians to back his “American Recovery and Reinvestment Plan”, saying: said: “If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double digit unemployment and the American Dream slipping further and further out of reach.”

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