Paul Applegarth's surprise resignation last week as chief executive of the Millennium Challenge Corporation resulted from falling confidence within the Bush administration that the flagship aid programme was fulfilling expectations, according to administration officials.

The timing of the resignation was awkward for the administration, occurring just before the Group of Eight summit in Scotland next month. At the summit, President George W. Bush will promote the Millennium Challenge Account, overseen by the MCC, as the US's preferred way of raising aid flows to African countries.