Paul Wolfowitz, president of the World Bank, has triggered a bitter conflict with the bank’s senior career staff by empowering a group of close political advisers to pursue aggressively what he sees as widespread corruption surrounding bank projects.

The dispute has come to a head with the appointment last week of Suzanne Rich Folsom, a counsellor to Mr Wolfowitz with close ties to the Republican party, as the new director of the Department of Institutional Integrity, the internal bank watchdog that investigates suspected fraud and staff misconduct.