Speculation rife that Brown may head IMF

The decision by the International Monetary Fund's (IMF) managing director, Horst Koehler, to quit has sparked speculation that UK Chancellor Gordon Brown may replace him.

The Guardian said IMF sources had confirmed Brown, who already chairs the IMF's key decision-making committee, was one of the top candidates to replace the German as managing director. However the Treasury in London has moved to play down the report saying : 'this is speculation. It would be far too premature to comment'.

Mr Koehler quit his post yesterday, a year ahead of schedule, to join the race for the German presidency in May. His deputy, Anne Krueger, has taken on his role until a successor is appointed.

Traditionally, the IMF is run by a European, while the World Bank leadership goes to an American. Koehler, who took up his IMF position in 2000.