WASHINGTON - It was thought by many that Dominique Strauss-Kahn's bail hearing today could spell the end of his leadership of the International Monetary Fund.

But he took the decision out of others' hands.

The International Monetary Fund announced that its embattled managing director intends to resign, effective immediately, as he faces sexual assault charges in New York.

The IMF's executive board released a letter from the French executive late last night in which he denied the allegations lodged against him but said that with "great sadness" he felt compelled to resign. He said that he was thinking of his family, and that he wanted to protect the IMF.

Had a New York judge denied bail for Strauss-Kahn or imposed highly restrictive conditions on his freedom, the IMF's executive board would have expected him to resign, two senior IMF officials said yesterday. If he didn't, the board could have removed him on the grounds that he couldn't lead the IMF from a jail cell or far from its Washington headquarters.

The IMF has appointed an interim chief.

Europe has "an abundance of highly qualified candidates" to lead the IMF, German government spokesman Christoph Steegmans declared yesterday. He also noted the relevance of having a European at the helm, to deal with the debt problems that have racked the eurozone.

Steegmans didn't name any potential candidates or say whether Germany might propose one. But German Chancellor Angela Merkel, along with the finance ministers of Sweden and the Netherlands, have pressed Europe's case for the IMF leadership.

Meanwhile, investigators in New York City cut out a piece of carpet in a painstaking search of a penthouse suite of the Sofitel Hotel for DNA evidence that could corroborate a hotel maid's claim that the IMF chief tried to rape her, law-enforcement officials said yesterday.

New York detectives and prosecutors believe hotel-room may contain Strauss-Kahn's semen, spat out after an episode of forced oral sex, the officials said, speaking on condition of anonymity.

In addition to examining the suite, investigators were looking at the maid's keycard to determine whether she used it to enter the room, and how long she was there, officials said.

Strauss-Kahn was removed from a plane Saturday at John F. Kennedy International Airport, moments before he was to fly to Paris.

He was supposed to meet Sunday with German Chancellor Angela Merkel and then join EU finance ministers in Brussels.Strauss-Kahn's flight from Washington was paid for by the IMF, with an approved stopover in New York, the official said.

That meant his New York visit was in a private capacity. He was not accompanied by security personnel or any IMF aides.

The official said Strauss-Kahn's security team was to meet him at Paris' Charles de Gaulle airport. His assistants were already in Europe.