Ecuador 'expels World Bank envoy'

Rafael Correa has threatened to default on Ecuador's debts

Ecuador's President Rafael Correa has ordered the expulsion of the World Bank's representative in the country, sources say.

"We have received a letter in which our country manager is expelled," an unnamed bank official told Reuters.

"We are analysing the situation and looking to open up a dialogue."

Mr Correa had demanded that the World Bank explain why it suspended a $100m (£50m) loan in 2005 while he was economy minister.

He says it was in retaliation for his reforms of the country's oil sector.

The bank says Ecuador violated the terms of the loan by dissolving an oil fund earmarked to pay foreign debt.

There was no official confirmation of Eduardo Somensatto's expulsion, but a senior economy ministry official told AFP news agency the letter would be made public soon.

Threat to default

Mr Correa, who was elected in November, is an economist who trained in the US.

The leftist president has paid off Ecuador's debt to the International Monetary Fund and wants to minimise the country's dependence on foreign credit.

He has threatened to default on the country's other debts.

Ecuador still owes the World Bank $748m, the economy ministry says.

Mr Correa last week won a referendum on his call to rewrite Ecuador's constitution.

The president has said he wants to depoliticise the courts and decentralise the state.

But his critics say the project is designed to put more power in the president's hands.