By ROBERT BURNS

WASHINGTON - Former Pentagon (news - web sites) official Richard Perle resigned Thursday as chairman of a group that advises Secretary Donald H. Rumsfeld on policy issues, saying he did not want a controversy over his business dealings to distract from Rumsfeld's management of the war in Iraq (news - web sites).

In a brief statement, Rumsfeld thanked Perle for his service and said he was grateful that the former Reagan administration official had agreed to remain a board member. Rumsfeld made no reference to a reason for Perle giving up the chairmanship.



Perle said he was stepping aside voluntarily.



"I have seen controversies like that before and I know that this one will inevitably distract from the urgent challenge in which you are now engaged," Perle wrote in a resignation letter.



In the letter, made public by the Pentagon and dated March 26, Perle assured Rumsfeld that he had abided by rules applying to members of the Defense Policy Board. He has been chairman of the board since July 2001. The position is unpaid but is subject to government ethics rules that prohibit using public office for private gain.



The controversy centers on Perle's deal with bankrupt Global Crossing Ltd. to win government approval of its purchase by a joint venture of two Asian firms. Perle would receive $725,000 for his work, including $600,000 if the government approves the deal, according to lawyers and others involved in the bankruptcy case.



The deal is under review by a government group that includes representatives from the Defense Department.



Perle denied any wrongdoing.



"The guiding principle here is that you do not give advice in the Defense Policy Board on any particular matter in which you have an interest," Perle said in a recent interview. "And I don't do that. I haven't done that."



The Defense Policy Board is a bipartisan group that advises the secretary of defense on a wide range of policy issues. Its 30 members are a mix of former military and government officials. They include former CIA (news - web sites) Director James Woolsey, former Vice President Dan Quayle (news - web sites), former Secretary of State Henry Kissinger and former Air Force Chief of Staff Ronald Fogleman.



Perle wrote in his resignation letter that he could not "quickly or easily quell criticism" in the Global Crossing controversy, adding that it was "based on errors of fact."



Nonetheless, he wrote, "I would not wish to cause even a moment's distraction from" the war effort.



Perle said he was advising Global Crossing that he would not accept any compensation from the pending sale and that any fee for his past services would be donated to the families of American forces killed or injured in Iraq.



In his written statement, Rumsfeld thanked Perle for his service.



"He has been an excellent chairman and has led the Defense Policy Board during an important time in our history," Rumsfeld said. "I should add that I have known Richard Perle for many years and know him to be a man of integrity and honor."



Perle was an assistant secretary of defense during the Reagan administration.



He became involved in another controversy stemming from an article in The New Yorker that said he had lunch in January with Saudi-born businessman Adnan Khashoggi and a Saudi industrialist.





The industrialist, Harb Saleh Zuhair, was interested in investing in a venture capital firm, Trireme Partners, of which Perle is a managing partner. Nothing ever came of the lunch in Marseilles; no investment was made. But the New Yorker story, written by Seymour M. Hersh, suggested that Perle, a longtime critic of the Saudi regime, was inappropriately mixing business and politics.

Perle called the report preposterous and "monstrous."

Perle, 61, was so strongly opposed to nuclear arms control agreements with the former Soviet Union during his days in the Reagan administration that he became known as "the Prince of Darkness."