The International Monetary Fund (IMF) said on Saturday it was investigating whether IMF managing director Dominique Strauss-Kahn abused his power in an affair with a subordinate who has since left the global institution.

The investigation comes as several countries turn to the IMF for financing to help ease the effects of the worst global financial crisis since the Great Depression and politicians consider the fund's role in preventing future crises.

The Washington-based lender said in a statement the investigation was ordered by Shakour Shaalan, head of the IMF's 24-member board, after the matter came to his attention during the summer. It is being handled by an outside law firm and is to be completed by the end of October.

'All allegations, particularly those involving senior management, are taken extremely seriously,' an IMF spokesman said. 'The dean has asked external counsel to conduct an independent investigation and determine the validity of the allegations,' the spokesman added.

Strauss-Kahn, a former French finance minister who came to the job just under a year ago, said he was co-operating with the investigation.

'With my full support the IMF is examining an incident which occurred in my private life in January 2008,' Strauss-Kahn said in a statement. 'I have co-operated and am continuing to co-operate with outside counsel to the Fund concerning the matter.'

'At no time did I abuse my position as the fund's managing director,' he said, 'I look forward to the report of outside counsel.'

The IMF probe follows more than a year after former World Bank President Paul Wolfowitz was forced to resign amid a staff uproar over a high-paying promotion he authorized for his companion who worked at the bank.-Reuters