Martha Stark, New York’s finance commissioner, was forced to resign on Tuesday amidst charges of nepotism and allegations that she was having a romantic relationship with a female subordinate.

Initially, Ms Stark, who is openly lesbian, had come under scrutiny after accepting income from a real estate company while also administering the city’s real estate taxes.

Earlier this month it was reported that Ms Stark was having a relationship with former Assistant Commissioner, Dara Ottley-Brown.

It was then that Mayor Michael Bloomberg asked the Department of Investigation and Conflict of Interest panel to look into Ms Stark’s relationship with Dara Ottley-Brown, former Assistant Commissioner.

It is prohibited for city employees to engage in personal or financial relationships with superiors or subordinates.

Ms Stark has maintained however that the relationship only began once Ms Ottley-Brown had left the Finance Department for a position on the city’s Board of Standards and Appeals.

Investigators were also asked to look into reports that Ms Stark had employed relatives. The City Charter prohibits city employees from using their position to benefit family members and spouses.

Ms Stark took office in February 2002, soon after Mayor Bloomberg’s election, and was one of the highest-ranking African-American officials in the administration, making $189,700. Her final day in office will be Friday.

Despite the controversy, Mayor Bloomberg has praised Ms Stark’s performance in the workplace and said in a brief statement: “I want to thank Martha for her years of service, and I want to recognise the many reforms that Finance developed and implemented under her leadership,”

“Martha made the Finance Department – and our city – a better place.”

Two city officials told the New York Daily News that Mayor Bloomberg never lost confidence in Ms Stark’s abilities, but grew tired of what an official called “the accumulated weight of all this stuff.”

Deputy Commissioner Michael Hyman, a 21-year veteran of the department, will take over as acting commissioner while the city searches for a permanent replacement.

Ms Stark’s lawyer, Randy Maestro, has defended his client and maintains: “Stark did nothing wrong here, except try to keep her private life private,”

“New York City has lost one of its finest public servants.”