Paul Volcker is to make public his initial 200-page report in New York

The UN oil-for-food operation in Saddam Hussein's Iraq was "tainted" and the official in charge violated rules on sales, an investigation is to report.

Inquiry chief Paul Volcker says there is "conclusive" evidence that the UN programme director had a "conflict of interest" but abuse was not widespread.

The controversial scheme let Iraq sell oil to buy food and medicine to ease the effects of international sanctions.

The programme director, Benon Sevan, has repeatedly denied any wrongdoing.

A clear lapse from disciplined judgment has been found   Paul Volcker   Q&A: Oil-for-food scandal

A separate report on UN Secretary General Kofi Annan and his son will be published later.

Mr Annan's son, Kojo, worked for a firm involved in the programme, which ran from 1996 to 2003.

Among the complaints about the scheme are claims that Saddam Hussein might have diverted part of the money for his own uses.

Singled out

Mr Volcker - appointed last April by Mr Annan to investigate the allegations of corruption - will reveal the initial findings by his independent panel on Thursday.

Hours before he was scheduled to make his 200-page interim report public, Mr Volcker wrote in the Wall Street Journal that there had been a "clear lapse from disciplined judgement" in managing the oil-for-food programme.

The former US Federal Reserve chairman wrote: "We have found in each case that the procurement process was tainted, failing to follow the established rules of the organisation designed to assure fairness and accountability."

But, he added, the UN administration of the programme appeared to be "free of systematic or widespread abuse".

The programme was supposed to ease the burden of sanctions on Iraqis

Mr Volcker, whose final report is expected in June, singled out Mr Sevan for criticism.

He said there was conclusive evidence that Mr Sevan was involved in choosing which companies got lucrative oil contracts.

By so doing, he said, Mr Sevan "placed himself in an irreconcilable conflict of interest, in violation both of specific United Nations rules and of the broad responsibility of an international civil servant to adhere to highest standards of trust and integrity".

Correspondents describe Mr Sevan as a veteran UN employee who has served in many of the world's trouble spots.

The Cypriot joined the organisation in 1965 and served in a variety of posts before his appointment as Executive Director of the Iraq Programme in 1997.

'Harsh judgements'

Mr Volcker also criticised the UN internal audit process as "underfunded and undermanned" and its management as "lacking".

"Perhaps not surprisingly," he said, "political considerations intruded" into procurement.

Mr Annan said on Wednesday that he anticipated some "harsh judgements" on his organisation from the Volcker panel.