World Bank President Paul Wolfowitz may consider resigning, but only if he is cleared of any wrong doing in securing a promotion and pay raise for his girlfriend, The Wall Street Journal reported Tuesday.

Calling accusations against him a "smear campaign," Wolfowitz denied any wrong doing. He previously insisted that he would not resign.

"I acted transparently, sought and received guidance from the bank's ethics committee and conducted myself in good faith in accordance with that guidance," the president said Monday.

A change in his position could pave the way for a compromise that is being explored by the bank's board, under which a special panel would at least avoid a harsh condemnation of his conduct in exchange for his resignation, the report said.

He would step down after the statement, bank officials were quoted as saying.

The seven-member panel, which was created more than three weeks ago by the bank's board to review Wolfowitz's conduct, met Monday to hear from Wolfowitz, the report said.

The panel also heard from Shaha Riza, the bank employee with whom Wolfowitz has been romantically linked, said the report.

The report said that the Bank's board had been debating for several days on what actions, if any, should be taken to resolve the controversy over Wolfowitz's role in the case.

The debates focused on a range of possible disciplinary remedies, including whether Wolfowitz should be suspended, said the report.

The compromise being considered appeared designed to create a face-saving atmosphere for Wolfowitz to step down, the report said.

Source: Xinhua