Wolfowitz won't resign

By Lesley Wroughton

WASHINGTON (Reuters) - World Bank President Paul Wolfowitz on Sunday dug in his heels over the promotion he approved for his girlfriend and said he intends to stay in his job, even as bank member governments voiced "great concern" the institution might not be able to function properly.

"I believe in the mission of this organisation and I believe that I can carry it out," Wolfowitz told a news conference shortly after the World Bank development committee issued a strongly-worded statement conveying unease.

The committee of aid ministers from around the globe said it was crucial the bank's credibility not be tarnished by the controversy over the high-paying promotion Wolfowitz agreed for his girlfriend, bank employee Shaha Riza, before she was assigned to work at the State Department.

"The current situation is of great concern to all of us," the ministers said in a communique after the committee met.

"We have to ensure that the bank can effectively carry out its mandate and maintain its credibility and reputation as well as motivation of the staff," the ministers said.

In a news conference shortly after those tough words, Wolfowitz said a decision on the matter should be left to the bank's board of member countries.

"We need to work our way through this," he said. "The board is looking into the matter and we'll let them complete their work."

The former Pentagon No. 2 cited his accomplishments since taking the helm of the poverty-fighting lender in mid-2005, pointing at several projects in Africa, where he has found his strongest backing.