European officials said they would continue to support UN Secretary General Kofi Annan Wednesday even though an investigation into irregularities in oil-for-food program accuses him of lax oversight and slow response to the scandal.

EU leaders told Reuters that Annan is playing an important leadership role in the world body, "notably with regard to the process of UN reform," said Marc Bichler, deputy ambassador of Luxembourg, which holds the EU presidency. But he added that the EU expected a tightening of the UN regulations, particularly contract procurement procedures, to avoid "comparable shortcomings in the future."

Other officials including British Ambassador Emyr Jones Parry said that the world much look forward towards a September General Assembly session focusing on reforming the UN and achieving its poverty alleviation and development goals.

"The priority of the United Nations is now to address the key issue -- which is the summit in September for which we expect and look forward to the leadership of the secretary

general," he told Reuters.

Report fails to implicate Annan

A report released Tuesday after a probe by Paul Volcker, a former US Federal Reserve chairman, found nothing to implicate Annan in trying to steer Iraq contracts to the Swiss firm Cotecna. Cotecna was awarded a $10 million (7.7 million euros) annual contract to monitor goods sent to Iraq and employed Annan's son, Kojo Annan, who is now a businessman in Nigeria.

Still, the inquiry found that Annan and UN officials were slow to investigate potential problems. It also discovered that the UN leader's former chief of staff shredded documents - possibly related - even though the matter was being investigated.

The investigation also found that Cotecna and Kojo Annan had misled the UN leader regarding his son's ties to the company before and after the contract was awarded. And what particularly troubles EU and other leaders are the well-established links between the Annans and some Cotecna officials.

Sevan accused in initial investigation

An initial report in January accused Benon Sevan, who heads the UN program, of steering about $1.5 million in oil contracts to an Egyptian acquaintance.

The $67 billion oil-for-food program, which began in December 1996 and allowed the Iraqi government under Saddam Hussein to sell oil to finance purchases of civilian goods for its people living under UN sanctions. The scheme ended after the US-led invasion in 2003.

Afterwards, Iraq provided documents showing bribes, kickbacks and oil smuggling worth about $2 billion within the program and another $8 billion from oil exports outside of the program, according to a CIA report.

Some longstanding American critics of the UN, including US Congressman Norm Coleman, of Minnesota called for Annan's resignation. But US State Department spokesman Adam Ereli expressed continued support for Annan but told Reuters that some of the report's findings were "troubling, particularly the failure to recognize the appearance of a conflict of interest."

A final report will be released in June. It is expected to also comment on the Security Council's ignoring of the fact that Saddam was skirting the program's restrictions and selling of oil.