Mr Gerster's role and style made him few friends

Economy Minister Wolfgang Clement said the government aimed to find a successor for Florian Gerster within four weeks.

The decision followed a vote of no confidence in Mr Gerester by the office's supervisory board.

The vote followed accusations that Mr Gerster had awarded multi-million-euro contracts without the required tender.

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

Mr Clement said: "I regret this vote. Florian Gerster had, in a difficult economic period, taken on one of the most challenging reform tasks and had made good progress."

Controversy

The decision to dismiss Mr Gerster came despite Berlin trying to hold on to him until the last, saying he was the best man for the job.

The move marks a bid to end months of controversy surrounding Gerster, which some say was caused chiefly by resentment within the 90,000 strong Labour Office against his brash reforming style rather than any serious misdemeanours.

Several journalists have said a media campaign against Gerster was fed by leaks from within the management of the Nuremberg-based Federal Labour Office.

Mr Gerster himself claims 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.

He 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.