Gonzales deputy resigns amid row

The affair is being investigated by a Senate committee. The White House denies the firings were politically motivated, citing poor performance.

Attorney General Alberto Gonzales praised Mr McNulty's record of service and called him "a dynamic leader".

Correspondents say the decision puts pressure on Mr Gonzales to also resign.

In a written statement Mr McNulty said he was stepping down for family and financial reasons and would leave his post some time in the late summer.

"Paul is an outstanding public servant and a fine attorney who has been valued... as both a colleague and a friend"
Alberto Gonzales
Attorney General

"The financial realities of my college-age children and two decades of public service lead me to a long overdue transition in my career," he said.

However, Mr McNulty had recently run into difficulty during testimony to Congress, when he admitted one of the eight attorneys was fired to make way for a political appointee, contradicting his boss who insists all the firings were based on performance, not politics.

His comments prompted a swift rebuttal from the attorney general, who said his deputy had misled Congress.

Mr McNulty is the third - and highest ranking - official to resign from the Justice Department since March.

Terror cases

Responding to the resignation, Mr Gonzales praised his deputy, describing him as "a dynamic and thoughtful leader".

"Paul is an outstanding public servant and a fine attorney who has been valued here at the department, by me and so many others, as both a colleague and a friend," he said.

Mr McNulty has been in the job for 18 months. He is expected to remain in the post until the Senate approves a successor.

He had previously served as US attorney in Alexandria, Virginia in the wake of the 11 September terror attacks.

There he worked on a number of terrorism cases, including the prosecution of Zacarias Moussaoui, who admitted to conspiracy over 9/11.