Page last updated at 07:16 GMT, Tuesday, 21 October 2008 08:16 UK

IMF chief apologises for affair

Dominique Strauss-Khan (L) with his wife Anne Sinclair pictured in August 2006 in south-western France
The IMF chief's wife said she had forgiven him his affair

International Monetary Fund (IMF) chief Dominique Strauss-Kahn has apologised for having an affair with an employee, in an e-mail to staff.

He expressed regret over the affair and described it as "an error of judgement" but he again denied any abuse of power.

The IMF said on Saturday that an external lawyer would investigate.

It is alleged Mr Strauss-Kahn's former girlfriend, a senior economist named as Piroska Nagy, received a higher-than-usual severance package.

The controversy comes as the IMF deals with the worst financial crisis since the Great Depression of the 1930s.

'One-night stand'

In a staff memo after meeting with the IMF board on Monday, Mr Strauss-Kahn apologised to employees, Ms Nagy, and to his wife, French television personality Anne Sinclair.

"I want to apologise to the staff member concerned for my error in initiating this relationship," the former French Socialist government minister said.

"I acknowledge and regret the difficult situation this has created for her. I also apologise to my wife and family," the 59-year-old added.

His e-mail said he expected to be cleared by the inquiry and he added: "I firmly believe that I have not abused my position."

On her blog on Sunday, Mr Strauss-Kahn's wife said: "For my part, this one-night stand is now behind us; we have turned the page."

Ms Nagy's lawyer told Reuters news agency his client, who was a senior economist in the IMF's Africa Department, did not receive preferential treatment before she took a staff buyout offer in August.

Ms Nagy, a Hungarian-born economist, is now working for a bank in London.

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