Mr Gerster's role and style made him few friends

Florian Gerster is accused of having awarded three multi-million-euro contracts without the required tender.

The government has failed to back him unequivocally, and an ally on Friday called on him to resign.

"Confidence in him has gone," said North Rhine-Westphalian labour minister Harald Schartau.

Mr Gerster has denied the accusation, but German media reported on Friday that six more contracts were being called into question.

Contract controversy

Suspicions against Mr Gerster were first raised in November, when it was reported that he had awarded a 1.3m-euro (�895,000; $1.7m) public-relations contract without going through the usual preliminaries.

Press reports dug up two more questionable contracts this week.

In the meantime, political pressure has built up, particularly from the opposition liberal Free Democrats.

Crucially, he has failed to secure the open support of the government.

Mr Gerster now faces an extraordinary meeting of the Federal Labour Office board this weekend, at which a report into his behaviour will be discussed.

Political persecution?

Mr Gerster says he is the victim of a witch-hunt, the result of his political affiliation to the Social Democratic Party (SPD) of Chancellor Gerhard Schroeder, as well as to his cost-cutting and reforms at the Federal Labour Office.

Mr Gerster is known for his high-handed management style, and for the relative luxury of his working conditions; he is paid twice as much as his predecessor, and stays in a plush hotel in the Office's base of Nuremberg rather than take a flat there.

According to some reports, even the government now wants him to go.

But his departure could be awkward for Mr Schroeder, who counts on Federal Labour Office support to push through a much-touted package of market liberalisation.