The director of a respected British university resigned Thursday amid a controversy over the institution's links with the family of Libyan ruler Moammar Gadhafi.
Howard Davies, director of the London School of Economics and Political Science, said the university's reputation has suffered because of its links to the Libyan regime _ including receiving money from a foundation run by Saif al-Islam Gadhafi, the leader's son and a former student at the university.
The university's council said it will now conduct an independent external inquiry to investigate the institution's relationship with Libya and with Saif Gadhafi.
"I advised the (university's) council that it was reasonable to accept the money and that has turned out to be a mistake," he said. "There were risks involved in taking funding from sources associated with Libya, and they should have been weighed more heavily in the balance."
The LSE accepted a donation of 1.5 million pounds for research from the Gaddafi International Charity and Development Foundation, run by Saif Gadhafi, in 2009.
The university said that of that amount, 300,000 pounds ($488,061) has been received. Amid a storm of student protests and outside criticism, the LSE spent the money on a scholarship fund for North African students.
Davies himself once served as former Prime Minister Tony Blair's economic envoy to Libya, and in 2007 he accepted $50,000 paid to the university in return for his advice to Libya's sovereign wealth fund. In his letter, he said he misjudged those decisions.
"There was nothing substantive to be ashamed of in that (modest and unpaid) work, and I disclosed it fully, but the consequence has been to make it more difficult for me to defend the institution," he wrote.
The LSE said the inquiry will also look into the academic authenticity of Saif Gadhafi's Ph.D. thesis, awarded in 2008, after rumors emerged that the parts of the document were plagiarized and ghostwritten. Davies said that as far as he knew the degrees to Saif Gadhafi were correctly awarded, and there was no link between the donation and the degrees.
Saif Gadhafi was long seen as the most respectable of Gadhafi's brood, cultivating the image of a budding reformer and winning plaudits from world leaders and rights campaigners with talk of democracy and development.
He attended the 2009 World Economic Forum in Davos as one of its "Young Global Leaders" _ a gathering of leaders under 40 who "have already demonstrated their commitment to serving society at large," according to the summit's website. The same year, Human Rights Watch's Sarah Leah Whitson praised the younger Gadhafi's charity as driving what she called a "Tripoli Spring" of openness and reform.
But Gadhafi's mask apparently slipped as the protest movement besieging the Arab world began to rock his father's regime. In a rambling, televised speech last week he angrily threatened "rivers of blood" if demonstrators refused to accept government offers of reform.
In an interview with BBC radio last week, Davies said he accepted that the school had made an error of judgment when it gambled on Saif Gadhafi being a force for positive change within his father's regime.
"In retrospect you can say, that, knowing what we now know about how he has behaved in this crisis, that's a judgment that we might have made differently," he said.
Some critics said the LSE should never have established ties with him.
"The LSE did itself an enormous disservice," said Ben Cohen, an alumnus who now works as a communications consultant and commentator. "Academics who know the Middle East and should know better decided to give Saif (al-Islam) the benefit of the doubt."
But students interviewed at the school's central London campus Thursday were largely sympathetic to the dilemma faced by administrators and academics.
Lisa Lee, 19, said that while she supported the move to cut the school's ties with the Gadhafis, she noted that the LSE "gets a lot of donations from a lot of different people. They can't be judged necessarily on their father."
Aaron Edwards contributed to this report.