Ms Christine Lagarde, France's Finance Minister, has confirmed she will be a candidate to head the International Monetary Fund, defying sharp criticism from India, Brazil, China, Russia and South Africa on the tradition of a European heading the organisation.

After a “great deal of thought” and receiving the backing from leaders across Europe, the 55-year-old former head of US law firm Baker & McKenezie said she had made the decision to put her name into the ring. She would be the first female head of the 67-year-old institution.

The only other candidate put forward so far is Mexican central bank governor, Mr Agustin Carstens.

Yet, the rallying-around of European leaders has done little to quell the controversy surrounding the quest for a replacement for Mr Dominique Strauss-Kahn, the beleaguered former Managing Director who has been bailed for $1 million in cash.

Mr Arvind Virmani, the IMF Executive Director who represents India, Bangladesh, Bhutan and Sri Lanka, has joined representatives from China, Russia, South Africa and Brazil in describing the current convention of picking a European head as “obsolete.”

They pointed to previous pledges, including by the Euro Group President, Mr Jean Claude Junker, that Mr Strauss-Kahn was likely to be the fund's last European head.

(The British Prime Minister, Mr David Cameron, had also previously called on the institution to look to India and China).

European Governments have reacted cautiously to the criticism.

The British Treasury pointed to comments Mr George Osborne, the Chancellor of the Exchequer, had made at the weekend that their backing of Ms Lagarde was purely based on merit, and because she was the best person to do the job, while Mr Steffen Seibert, the spokesperson for Ms Angela Merkel told a press conference, that the German government strongly supported her too.

Ms Lagarde must win support of the IMF's 24-member executive board, though voting is heavily dominated by Europe and the US. While Mr Virmani represents a 2.81 per cent share of the vote, the US, France, Germany and the UK have 16.8 per cent, 4.3 per cent, 4.3 per cent, and 5.83 per cent respectively.

One thing that may hurt Ms Lagarde's chances is the possibility of an investigation into alleged “abuse of power” in a dispute between the government and Mr Bernard Tapie, a French businessman.

A French prosecutor has recommended that an investigation be started, and a government decision is expected in early June, ahead of when the final IMF decision will be made.

However, the greatest weakness of the campaign against a European IMF head ‘remains the failure to unite to put forward an alternative candidate' – something that could change should Mr Carstens win wider support.

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