Former IMF chief to be bailed today over hotel sex allegations

The judge set bail at one million dollars and approved an elaborate arrangement under which the 62-year-old diplomat and banker would be confined to a private apartment in Manhattan and monitored by armed guards.

Strauss-Kahn will also have to take out a five million dollar insurance bond.

Earlier prosecutors had unsuccessfully argued said he should remain behind bars. Strauss-Kahn resigned his IMF post pledging to devote “all his energy” to fighting allegations he sexually assaulted a New York hotel maid. He was formally indicted on the charges yesterday.

In a letter of resignation to the IMF board, he denied the allegations made against him “with the greatest possible firmness” and vowed to devote all his time and energy to proving his innocence.

Meanwhile, former British Prime Minister Gordon Brown’s prospects of taking over at the IMF suffered another blow yesterday as Business Secretary Vince Cable suggested the top job should go to someone from within the Eurozone.

Asked about the vacancy at the crucial international body following Strauss-Kahn’s departure, Mr Cable refused to comment directly on whether the former prime minister would be a suitable candidate.

But the Liberal Democrat Minister told BBC Radio 4’s Today programme: “I think promoting national champions, whoever they are, probably isn’t the best way of dealing with this. The IMF is dealing with a major economic crisis in Europe. They need somebody very effective and respected.

“Particularly somebody who understands the internal problems of the Eurozone. That is probably where the new head of the IMF will come from. If it doesn’t, someone from the eastern Asian countries who has had a very successful record in economic management.” Europe’s top officials closed ranks yesterday to demand that the IMF’s next leader be a European, someone with enough technical expertise and political savvy to handle the Continent’s debt crisis.

Strauss-Kahn, who has been praised for his leadership of the Intentional Monetary Fund and its involvement in solving Europe’s woes, resigned on Wednesday.

Europe has aggressively staked its traditional claim to the post even as fast-growing nations like China and Brazil say it is time to break that monopoly and seek an IMF chief from a developing country.