CHICAGO - NEW Mexico Gov Bill Richardson on Sunday withdrew as US President-elect Barack Obama's nominee for commerce secretary, becoming the first casualty among Obama's picks for his Cabinet.

Mr Obama said in a statement that he had accepted Richardson's withdrawal with 'deep regret'.

Mr Richardson, 61, denied any wrongdoing but feared a lengthy investigation would delay his confirmation by the US Senate.

Richardson becomes the first of Mr Obama's cabinet choices to withdraw. The Senate had been expected to easily confirm his appointment. Mr Obama is scheduled to take office on Jan 20.

Mr Richardson served as US ambassador to the United Nations and energy secretary in the Clinton administration and is a former member of the US House of Representatives.

He became an early Obama supporter after dropping his own presidential ambitions.

'Let me say unequivocally that I and my Administration have acted properly in all matters and that this investigation will bear out that fact. But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process,' Mr Richardson said in a statement released by the Obama transition team.

'It is also because of that sense of urgency about the work of the Commerce Department that I have asked the President-elect not to move forward with my nomination at this time. I do so with great sorrow. But a pending investigation of a company that has done business with New Mexico state government promises to extend for several weeks or, perhaps, even months,' Mr Richardson added in the statement.

First withdrawal
A federal grand jury in Albuquerque is investigating whether a financial firm improperly won more than $1.4 million (S$2.03 billion) in work for the state of New Mexico shortly after making contributions to political action committees of Mr Richardson, the Washington Post reported in December.

The probe focuses on whether the governor's office urged a state agency to hire CDR Financial Products, the Post reported.

Mr Richardson said he would remain as governor and told Mr Obama he would be eager to serve in the future.

Mr Richardson's withdrawal was another stumble in what Obama had sought to be a smooth transition, and the latest headache for the president-elect's Democratic Party.

Illinois Gov Rod Blagojevich is under investigation on charges of trying to sell the Senate seat Obama recently vacated. Democrats vow to block Blagojevich's appointee to the Senate, calling the selection tainted.

In Congress, Rep Charles Rangel, a New York Democrat and chairman of the House of Representatives' tax-writing committee, is the object of an ethics probe into his finances.

The news about Mr Richardson broke just a couple of hours before Mr Obama was due to leave Chicago and join his family in Washington, where he'll be sworn in as president in two weeks.

Wife Michelle and daughters Sasha, 7 and Malia, 10, beat their father to their new home city. They arrived on Saturday evening in order to avoid the media spotlight surrounding Mr Obama and get settled before school starts on Monday.

The Obamas will be staying at the luxury Hay Adams Hotel until they move on Jan 15 into Blair House, the guest residence across Pennsylvania Avenue from the White House.

Mr Obama's daughters start school at the Sidwell Friends School on Monday. After seeing them off to school Obama is due to meet with his top economic advisers and hold meetings with top congressional leaders on an economic stimulus package. -- REUTERS