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Amid mounting pressures, beleaguered International Monetary Fund (IMF) managing director, Dominique Strauss-Khan, resigned on Thursday, but insists he was innocent of the sexual assault accusations hurled against him.

“It is with infinite sadness that I feel compelled today to present to the Executive Board my resignation from my post of Managing Director of the IMF.

“I want to say that I deny with the greatest possible firmness all of the allegations that have been made against me,” he said in a statement.

Strauss-Kahn, one of the world’s most powerful man and considered as a sure winner in the next French presidential elections, is jailed in New York and awaiting a grandy jurity decision whether there is sufficient evidence to indict him of the allegations that he sexually assaulted a 32-year-old chambermaid in Soffitel Hotel in New York last Saturday.

The International Monetary Fund’s managing director has traditionally been an European male, often a Frenchman. But with Dominique Strauss-Kahn’s resignation amid sexual assault charges, the job is available.

As the Strauss-Kahn controversy rages here, the political fallout appears unclear. So far, the sexual assault allegations dogging him have not hurt the image of his opposition Socialist party. Indeed, an IPSOS survey this week puts another, less charismatic Socialist politician, Francois Hollande, ahead in the polls, scoring 29 percent of possible votes - 10 points ahead of conservative President Nicolas Sarkozy.

"Holland has started his campaign a few months ago quietly, saying he was a normal man and a good politician. And this image of stability and normality in [this] context is probably going to play in his favor," said Gosset.

The Strauss-Kahn scandal has also benefited another politician - Marine Le Pen, the 42-year-old leader of the far-right National Front and a rising star in French politics.

Le Pen told French radio Thursday that Strauss-Kahn's indictment definitely puts him out of the presidential race. She has described him as politically discredited.

Along with support, Strauss-Kahn also earned derision among ordinary French, who criticized his wealthy, "caviar-left" lifestyle. Analyst Philippe Moreau Defarges believes the sexual assault charges now facing him only serve to deepen public disillusionment toward the political establishment.

So far, President Sarkozy has remained uncharacteristically silent about the scandal. In 2007, he championed Strauss-Kahn's candidacy to head the IMF - in part, observers say, to get a rival out of the way.

Strauss-Kahn's downfall has not improved Sarkozy's ratings. He remains one of France's most unpopular presidents ever.

Still, journalist Gossett says its too early to write off a second Sarkozy term.

"He's going to fight right to the end and he's very efficient. So even if the polls are low today, it doesn't mean a thing."

Next week, Sarkozy hosts the G8 summit in the French city of Deauville - giving him the opportunity to burnish his international statesman's stature.

And there are a slew of reports that his glamorous wife, Carla Bruni Sarkozy, is pregnant. The presidency has no comment, but recent pictures of Sarkozy are revealing. That may cast the French president in another flattering light - as a happily married, family man.