German President quits in loan scandal

Wulff stands down after criminal investigation begins over charges of improper favours

The German President, Christian Wulff, resigned yesterday over a deepening scandal in which he faced allegations of improperly accepting benefits from a string of wealthy entrepreneurs and charges that he tried to muzzle the press to conceal his misconduct.

The 52-year-old conservative's decision to step down was an embarrassing blow for Chancellor Angela Merkel, who personally chose her protégé for the largely ceremonial presidential post 18 months ago for party political reasons.

Ms Merkel, who cancelled a planned visit to Italy, said she accepted Mr Wulff's resignation with "great respect" and "deep regret". She pledged to seek out a new candidate for the job who could be supported by a consensus among Germany's main political parties.

Both Mr Wulff and his 38-year-old wife Bettina looked crestfallen as they appeared before cameras in Berlin's Bellevue Palace, where the doleful President formally announced his resignation. Insisting that Germany needed a highest representative who enjoyed the nation's trust, he declared: "The development of the past days and weeks have shown that this trust, and along with it my ability to make an impression, have been effectively compromised."

His announcement came hours after state prosecutors requested that parliament suspend the President's immunity from prosecution to enable them to open a criminal investigation against him on charges that he had improperly granted and accepted favours.

The President had been under mounting pressure since December when allegations emerged that he had failed to declare a €500,000 loan he received from the wife of a wealthy businessman, which he obtained while in his previous job as conservative Prime Minister of Lower Saxony. The scandal deepened when it emerged that Mr Wulff had telephoned the editor of Germany's mass-circulation Bild newspaper and tried to persuade them to kill a story about the loan. He left a phone message angrily accusing the editor of "crossing a red line". But the paper went ahead and published the story anyway.

Mr Wulff subsequently tried to defuse the scandal by claiming he had simply wanted to delay the report. But his attempts to exonerate himself failed to convince and his popularity took a nosedive. The loan accusations were quickly followed by a swathe of stories alleging the President had received considerations from wealthy businessmen, including a flattering biography of him published shortly after he took office.

The scandal came to a head on Thursday when state prosecutors said they had sufficient evidence to open a criminal investigation against him. Their inquiry centres on Mr Wulff's dealings with the film producer David Groenewold, who paid for holidays Mr Wulff spent on the North Sea island of Sylt and at the Munich Oktoberfest in 2007.

In his role as Lower Saxony's premier, Mr Wulff had approved €4m-worth of state credit guarantees for one of Mr Groenewold's projects.

Mr Wulff said yesterday that he expected to be "completely cleared" of the charges levelled against him.