<p>Howard Davies said the university's reputation had "suffered" and so he had to quit.<br />Stating that the decision to accept 300,000 pounds for research from a foundation run by Gaddafi's son, Saif al-Islam, "backfired", Davies regretted visiting Libya to advise its regime about financial reforms.<br /><br />Saif Gaddafi had studied at the LSE for his MSc and PhD.Davies, a former head of the Financial Services Authority and deputy governor of the Bank of England, termed it a "personal error of judgement".<br /><br />"I have concluded that it would be right for me to step down even though I know that this will cause difficulty for the institution I have come to love," he said.<br /><br />"The short point is that I am responsible for the school's reputation, and that has suffered."<br />He said the decision to accept the money from Saif turned out to be a "mistake".<br />"I made a personal error of judgement in accepting the British government's invitation to be an economic envoy and the consequent Libyan invitation to advise their sovereign wealth fund," he said.<br /><br />Peter Sutherland, chairman of the LSE's court of governors, said Davies had been an outstanding director.<br /><br />The LSE council has commissioned an inquiry into the university's relationship with Libya and Saif. It will also establish guidelines for future donations.<br /><br />Lord Woolf, former Lord Chief Justice of England and Wales and former chairman of the Council of University College London, has been appointed to carry out the inquiry.</p>
<p>Howard Davies said the university's reputation had "suffered" and so he had to quit.<br />Stating that the decision to accept 300,000 pounds for research from a foundation run by Gaddafi's son, Saif al-Islam, "backfired", Davies regretted visiting Libya to advise its regime about financial reforms.<br /><br />Saif Gaddafi had studied at the LSE for his MSc and PhD.Davies, a former head of the Financial Services Authority and deputy governor of the Bank of England, termed it a "personal error of judgement".<br /><br />"I have concluded that it would be right for me to step down even though I know that this will cause difficulty for the institution I have come to love," he said.<br /><br />"The short point is that I am responsible for the school's reputation, and that has suffered."<br />He said the decision to accept the money from Saif turned out to be a "mistake".<br />"I made a personal error of judgement in accepting the British government's invitation to be an economic envoy and the consequent Libyan invitation to advise their sovereign wealth fund," he said.<br /><br />Peter Sutherland, chairman of the LSE's court of governors, said Davies had been an outstanding director.<br /><br />The LSE council has commissioned an inquiry into the university's relationship with Libya and Saif. It will also establish guidelines for future donations.<br /><br />Lord Woolf, former Lord Chief Justice of England and Wales and former chairman of the Council of University College London, has been appointed to carry out the inquiry.</p>