RINGWOOD, N.J. - A federal prosecutor who received a $46,000 loan from her boss - now the Republican candidate for New Jersey governor - has resigned.

Michele Brown said in her resignation letter submitted yesterday that she did not want to be a distraction for the U.S. Attorney's Office. GOP candidate Christopher J. Christie was U.S. attorney for New Jersey and Brown was in the office's executive ranks when she received the loan in 2007.

"I do not want to become a distraction from the critically important work we do," Brown wrote.

Brown's resignation was first reported by the Star-Ledger of Newark on its Web site. Christie issued a statement shortly afterward, praising Brown's work ethic and abilities as a lawyer.

Earlier yesterday, Christie said he would not ask Brown to end the 10-year mortgage loan he took out for her even if he is elected governor. He is trying to unseat Democratic Gov. Corzine in November.

Christie said Brown would have to decide whether to repay the loan early.

He said she was fulfilling her end of the deal by making $500 monthly payments. The loan goes through 2017.

Democrats have questioned the financial relationship between Christie and Brown, who rose to become the state's No. 2 federal prosecutor, but Christie yesterday said he saw no problem with it and planned to continue the arrangement.

"If she decides she wants to refinance the loan, that's always her choice. As long as she continues to pay the loan on a regular basis to me, that's the deal we made," he said.

Christie said he and his wife offered Brown the loan after Brown's husband lost his job and the couple's credit card debt ballooned.

Acting U.S. Attorney Ralph Marra, who Christie said knew about the loan, had said he viewed the loan as a financial transaction between friends.

Marra had allowed Brown to continue to help fulfill Freedom of Information Act requests filed by Corzine's campaign, even though some of the documents the Democrats wanted directly pertained to Brown's cases and travel.

Christie failed to disclose the loan on federal and state ethics forms, as required, and he failed to pay $420 in federal taxes on the interest income for 2007.

Christie apologized for the omissions last week and said he planned to file amended disclosure and income-tax forms.

Corzine spokeswoman Lis Smith said Brown's resignation did not put questions to rest about Christie's conduct as U.S. attorney.

"Whether it was illegally laying the groundwork for his gubernatorial campaign from the U.S. Attorney's Office . . . maintaining a secret financial relationship with the No. 2 at the . . . office during his campaign, or rewarding political cronies with millions of dollars in no-bid contracts, Christie still must answer to serious legal and ethical questions," Smith said.

Christie has been running for governor as an ethics champion. The Corzine campaign has alleged that Christie planned his campaign while still serving as U.S. attorney, in violation of federal law barring such activities. The campaign has also played up the Christie-Brown loan.

Christie described Brown and her husband as close friends. Christie and Brown worked together since he was confirmed as U.S. attorney in 2002 after being appointed by President George W. Bush. They also live near each other in the Morris County town of Mendham.

Brown was hired by the office in 1991 and promoted twice by Christie, rising to executive first assistant U.S. attorney, the No. 4 position, last year. She was promoted again after Christie resigned in December to the No. 2 post, acting first assistant U.S. attorney.

The office did not disclose Brown's salary or raises, but Christie said she was at the top of the pay scale, so she got no salary bumps along with her recent promotions. She and others in the office, however, received undisclosed bonuses.

Republicans have pointed out that Corzine has had his own issues with personal loans. Besides a $470,000 mortgage loan to then-girlfriend Carla Katz, which he later forgave, Corzine has lent money to others including two small-business loans of up to $500,000 nearly 10 years ago, which he disclosed but nonetheless became an issue in the 2005 governor's race.