Washington - Bill Richardson had been tapped by president- elect Barack Obama to serve as commerce secretary in the incoming US administration, but on Sunday the New Mexico governor surprisingly withdrew his name from consideration for the position.

Richardson cited an investigation of a company that had done business with New Mexico's government as grounds for the move. He did not provide details of the investigation, except to say that he and his administration "have acted properly in all matters." He said the probe would likely last for several weeks, or months, and would hamper his confirmation by the US Senate.

A grand jury in the south-western US state is investigating California firm CDR Financial Products Inc, which received 1.5 million dollars in fees from a state agency and had also donated 100,000 dollars to Richardson's political activities, Bloomberg news reported.

"Let me say unequivocally that I and my administration have acted properly in all matters and that this investigation will bear out that fact. But I have concluded that the ongoing investigation also would have forced an untenable delay in the confirmation process," Richardson said.

"Given the gravity of the economic situation the nation is facing, I could not in good conscience ask the president-elect and his administration to delay for one day the important work that needs to be done."

Richardson, 61, served as United Nations ambassador and energy secretary under former president Bill Clinton, the last Democrat in the White House. He has served as governor of New Mexico since 2003, a state he also represented for more than a decade in the US Congress, and briefly ran against Obama for the Democratic presidential nomination.

He was the first high profile Hispanic tapped to serve in the administration and speculation abounded that he had also been considered for secretary of state. Obama nominated former rival and New York Senator Hillary Clinton for that post.

Obama said in a statement said he regretted Richard's decision to withdraw his name from nomination, but looked forward to working with him in the future.

"Governor Richardson is an outstanding public servant and would have brought to the job of commerce secretary and our economic team great insights accumulated through an extraordinary career in federal and state office," Obama said. "It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the Cabinet in order to avoid any delay in filling this important economic post at this critical time."