Benjamin Ladner, who led American University for more than 11 years as president before being suspended in August amid an investigation of his personal and travel expenses, was ousted by the board of trustees last night.

"We felt that Dr. Ladner could not continue to lead the university effectively, and we need to replace him," acting board Chairman Thomas A. Gottschalk announced to a small crowd of students, who cheered the declaration at a news conference.

Gottschalk said the board concluded that Ladner should reimburse the university $125,000 for expenses inappropriately charged to the school and pay taxes on an additional $398,000 in income for 2002 to 2005, the three school years investigated by auditors.

But the trustees did not decide other key issues, including whether Ladner would be dismissed "for cause" and therefore not receive severance. Also unresolved is whether he will be allowed to stay as a faculty member and how long he can remain in the university-owned president's house.

The intense debate leading up to the decision reflected just how divided trustees have become since an anonymous letter prompted the spending probe. The split led to the abrupt resignation of the board chairwoman on the eve of yesterday's meeting and a marathon session that ended with trustees leaving with security escorts.

A woman who answered the phone at the president's house last night said Ladner was unavailable for comment. A group of trustees went to the house to inform him of the decision, Gottschalk said.

Cornelius Kerwin, the longtime provost, will continue as acting president of the private university in Northwest Washington. The board plans to authorize a search committee at its Nov. 11 meeting, although trustees plan to meet again this month to discuss the thorny issues they could not resolve last night.

The board, Gottschalk said, agreed to adopt the findings of its Audit Committee, which concluded that Ladner owed the university far more than his attorneys had argued.

Auditors hired by the board leadership initially had questioned university-paid spending by Ladner and his wife, Nancy, on French wine, meals at chic restaurants in New York and abroad and chauffeurs who did personal errands for the couple. Ladner's attorneys said the conclusions were distorted and unfair and that virtually all of the spending was appropriate under the terms of his contract.

Some faculty members, students and alumni demanded yesterday to know whether Ladner, 63, who received more than $800,000 in total compensation in 2004, would be given a "golden parachute" severance deal and a position as the school's most highly paid professor. Under the terms of a 1997 employment agreement that is in dispute, Ladner is entitled to both if he is let go without cause.

"I'm pleased that he's gone," Monica Price, a graduate student, said of Ladner, "but the fact that he could potentially be on this campus as a faculty member is absurd. They need to resolve these issues."

The board spent all day behind closed doors. Deans, faculty members and student leaders met with trustees midmorning at the start of the session, which lasted past nightfall. "It was seething tension" in the room, student government President Kyle Taylor said afterward. "You could feel it."

Some trustees argued, and some challenged the agenda and tried to install another chairman, according to a source with knowledge of the probe.

Gottschalk, however, said, "It was a very candid, respectful discussion."

More than just Ladner's fate and the 11,000-student school's future hung in the balance; the trustees' decision could ripple through other nonprofit boards as their members wrestle with issues of oversight and compensation.

Trustees, auditors and attorneys have argued for months about dollar figures, legal clauses and tax implications of Ladner's spending. The Justice Department is investigating. On campus, though, the debate has been both simpler and more philosophical: Does he still have the moral authority to lead the university?

"What he did was just plain wrong," Leslie E. Bains, a Ladner critic, said in a statement sent when she resigned as board chairwoman Sunday after other trustees had challenged her leadership. "He spent university money on things such as his son's engagement party and, to this moment, still says he was justified in doing so, even as he offers to repay a small portion of what is really owed."

Although Ladner's attorneys have argued that his spending was justified by the 1997 contract, some board members say that agreement was never ratified and would not hold up in court.

Ladner's attorneys have said in letters to the board that the investigation has been unfair. His supporters say Ladner is an honest, ethical man who was rewarded for improving the university, then blindsided by new rules.

Ladner has warned other university presidents that they can expect similar scrutiny as new oversight of corporate boards trickles down to the nonprofit world. Ladner has offered to pay back about $21,000 and pay taxes on an additional $32,000 of indirect income over the years auditors examined.

His supporters credit him with elevating a university in turmoil, one that had weathered a sex scandal and four presidents in four years, to a thriving academic institution with a growing national reputation. They said he inspired the community -- and donors -- to believe in a school with a public service mission and an international vision.

In the morning, before trustees met yesterday, protesters gathered on the school's main quad. "He must go!" professor Randy Persaud yelled, his words echoing off the stone buildings. The campus was unusually quiet, with most people on fall break.

It was a much smaller, quieter rally than the September event that sent students screaming across campus to the boardroom to confront trustees. This time, students chanted: "No golden parachute! Not a penny more!" They asked for greater transparency on board decisions and student and faculty representation on the panel. A few dozen protesters marched to Butler Pavilion, hoping to see trustees arriving. And two women popped up on the stairs outside the boardroom, one with an "I Ladner" sign, and began arguing with protesters.

"Ladner made this school," said Brandy Wells. "I feel like the student body is represented as totally against Ladner," and that's not true, she said. "I think he did a wonderful job at this school."

On the other side of the door, the meeting went on without Bains, who in her resignation statement said that "a very small, but mean-spirited group . . . have attacked anyone who dared to present facts to the board that they did not like."

They tried to derail the investigation, she said, and threatened lawsuits to stop the board from meeting to vote on the results. "And finally, they tried to call a special meeting of the board to reinstate the president with a generous salary package for his wife," Bains wrote.

Ladner opposed her bid to become chairwoman in May and told her so. The board members already had divided over whether to limit Ladner's compensation.

"The damage he has caused to this university far exceeds any facts and figures [about his accomplishments] that anyone can give," graduate student Veronica Onorevole said.

Senior Jordan Landry said that he was disappointed. "I guess I wasn't surprised because I kind of felt the pressure coming from all the students on campus, and all the faculty members had built up enough that it really affected the board, and that ultimately led to his demise."

But he is sorry that it happened, Landry said -- sorry for Ladner and his family.

Protest organizer Monica Price, left, and Haya Matsumoto, both graduate students at American University, rally at the college's main quad before moving near the room where trustees were meeting.