-- U.N. Secretary General Kofi Annan fired a staffer for manipulating contracts under the Iraq oil-for-food program, the first dismissal to result from a U.N.-backed inquiry into the $64 billion humanitarian operation, a spokesman announced Wednesday.

Joseph Stephanides, a Cypriot diplomat and longtime U.N. staffer, was dismissed over accusations that he tainted the bidding process for a company to inspect humanitarian goods entering Iraq under the program.

"Mr. Stephanides was advised accordingly yesterday and was separated from service with immediate effect," said Stephane Dujarric, a U.N. spokesman.

Reached by the Associated Press after the announcement was made, Stephanides rejected the charges and vowed to appeal. Stephanides, who had planned to retire in September when he turns 60, has two months to appeal.

"I am very disappointed by this decision," Stephanides said. "I look to the appeal process in the confident hope that justice will be made and I will be exonerated because I have committed no wrongdoing."

The oil-for-food program, established to help Iraqis suffering under U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, is the target of several corruption investigations and has become a lightning rod for critics of the United Nations.

An independent, U.N.-appointed inquiry led by former U.S. Federal Reserve chairman Paul A. Volcker first detailed the allegations against Stephanides in an interim report released in February. When the report came out, senior U.N. officials promised to punish anyone found guilty of wrongdoing.

Stephanides, head of the U.N. Security Council Affairs Division, had been accused of helping British-based Lloyd's Register Inspection Ltd. win an inspection contract even though there was a lower bidder, French-based Bureau Veritas, Volcker's inquiry found.

The committee never said that he sought to enrich himself. Instead, it described the deeply politicized atmosphere that surrounded the awarding of contracts, and officials' wariness about giving the inspection job to Bureau Veritas because several other companies awarded contracts were also French.

Investigators detailed the way Britain, one of five permanent members of the U.N. Security Council, may have exerted pressure to help Lloyd's win the contract.

In the same report, Volcker's investigators accused two other U.N. staff members of wrongdoing in the program. They are oil-for-food chief Benon Sevan and Dileep Nair, who headed the U.N. internal watchdog agency until he retired recently.

Under the program, which ran from 1996 to 2003, Iraq was allowed to sell oil provided the proceeds were used primarily to buy humanitarian goods.

In a second interim report, on March 29, Volcker's panel faulted Annan for not properly investigating allegations of conflict of interest in the awarding of a contract to a Swiss company that employed his son, Kojo Annan. But it concluded there was not enough evidence to prove Annan influenced the awarding of the contract or violated staff rules.