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Raphael G. Satter the Associated Press

LONDON (AP) -- An employee who had a brief affair with IMF chief Dominique Strauss-Kahn warned the organization about his behavior toward women in a letter sent three years ago.

The person who confirmed the existence of the letter is close to the former International Monetary Fund employee, Hungarian-born economist Piroska Nagy. The person declined to be identified, citing the sensitivity of the matter.

Nagy, who had worked at the IMF for decades, left the organization after the affair with Strauss-Kahn in 2008. An IMF-funded investigation into the affair cleared Strauss-Kahn of wrongdoing but criticized his judgment. The affair is back in the news after the 62-year-old Frenchman's incarceration on sex crimes charges in New York.

Nagy now works with the European Bank for Reconstruction and Development in London.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) - IMF chief Dominique Strauss-Kahn awoke Tuesday in a notorious jail on an attempted rape charge as the outside world swirled with questions about the truth of the accusations and pressure mounted on him to step down.

The 62-year-old managing director of the International Monetary Fund spent an uneventful night at the Rikers Island complex after being denied bail Monday, corrections officials said.

In asking that he be kept behind bars on charges he tried to rape a hotel maid, prosecutors had warned that the wealthy banker might flee to France and put himself beyond the reach of U.S. law, like the filmmaker Roman Polanski.

Defense lawyers have insisted there was no force involved and predicted Strauss-Kahn would be vindicated. Still, his arrest and detention have sent shock waves through the financial world, as well as French politics and culture.

Austria's finance minister suggested Tuesday that Strauss-Kahn consider stepping down to avoid damaging the IMF, which provides emergency loans to countries in severe distress and tries to maintain global financial stability.

"Considering the situation, that bail was denied, he has to figure out for himself that he is hurting the institution," Maria Fekter said as she arrived at a meeting of European finance ministers in Brussels.

Elena Salgado, Fekter's Spanish counterpart, said Strauss-Kahn has to decide for himself whether he wants to step down, considering the "extraordinarily serious" charges.

"If I had to show my solidarity and support for someone, it would be toward the woman who has been assaulted, if that is really the case that she has been," she said.

Strauss-Kahn, a member of France's Socialist party, was widely considered the strongest potential challenger next year to President Nicolas Sarkozy.

Defenders of Strauss-Kahn, a former finance minister, said they suspected a smear campaign or a set-up. Others expressed sympathy.

"I didn't like the pictures I've seen on television," Luxembourg Prime Minister Jean-Claude Juncker said Monday night, referring to footage of Strauss-Kahn in handcuffs being escorted by police outside a New York precinct house.

Showing a suspect in handcuffs is illegal in France since a 2000 law aimed at the preserving the presumption of innocence.

"K.O." screamed banner headlines in France's Le Parisien and Liberation papers, with full-page photos of an unshaven Strauss-Kahn in the New York courtroom where he was ordered held without bail Monday.

Strauss-Kahn's situation could translate to political leverage for Sarkozy, who is likely to get a populist boost from reports in a German newspaper, quoting the president's father, that Sarkozy's wife is pregnant.

Financial and world leaders are already speculating on who would succeed Strauss-Kahn at the IMF.

A final choice would largely hinge on whether the U.S. and the European Union continue to split the jobs of the two Washington-based sister organizations - the IMF and the World Bank. Since World War II, a European has headed the Fund, while the U.S. has grabbed the top job at the World Bank.

Strauss-Kahn was arrested Saturday at Kennedy Airport after the allegations at the Sofitel hotel near Times Square.

"This battle has just begun," defense attorney Benjamin Brafman told reporters Monday.

Brafman said defense lawyers believe the forensic evidence "will not be consistent with a forcible encounter." Defense lawyers wouldn't elaborate, but Brafman said "there are significant issues that were already found" that make it "quite likely that he will be ultimately be exonerated."

Strauss-Kahn was ordered jailed at least until a court proceeding Friday. He cannot claim diplomatic immunity because he was in New York on personal business and was paying his own way, the IMF said. He could seek that protection only if he were conducting official business, spokesman William Murray said.

Because of his high profile, Strauss-Kahn is being held in protective custody on Rikers Island, away from most detainees, said city Correction Department spokesman Stephen Morello. Unlike most prisoners who share 50-bed barracks, he has a single-bed cell and eats all meals alone there. He has a prison guard escort when he is outside his cell.

Rikers, on an island in the East River between the Bronx and Queens, is one of the nation's largest jail complexes, with a daily inmate population of about 14,000.

Its history includes run-ins between inmates and guards. In one case last year, a guard was sentenced to six years in prison for ordering inmate beatings as part of a rogue disciplinary system. Prosecutors said he imposed order by having teenage inmates beat other teenagers who had stepped out of line.

Also last year, more than a dozen guards were injured while quelling fights between inmates awaiting pretrial hearings. And in February, the city settled a wrongful-death lawsuit brought by the family of an inmate who died after a scuffle with guards.

The French newspaper Le Monde, citing people close to Strauss-Kahn, said he had reserved the luxury hotel suite for one night for a quick trip to have lunch with his daughter, who is studying in New York.

Strauss-Kahn is accused of attacking a maid who had gone in to clean the penthouse suite Saturday afternoon. He is charged with attempted rape, sex abuse, a criminal sex act, unlawful imprisonment and forcible touching. The most serious charge carries five to 25 years in prison.

The 32-year-old maid told authorities that she thought the suite was empty but that Strauss-Kahn emerged from the bathroom naked, chased her down a hallway, pulled her into a bedroom and dragged her into a bathroom, police said.

He grabbed her breasts, tried to pull down her pantyhose, grabbed at her crotch and forced her to perform oral sex, according to a court complaint. She broke free, escaped the room and told hotel staffers what had happened, authorities said. She was treated at a hospital for minor injuries.

"The victim provided a very powerful and detailed account of the violent sexual assault," Assistant District Attorney John "Artie" McConnell said. He added that forensic evidence may support her account. Strauss-Kahn submitted to a forensic examination Sunday night.

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Associated Press writers Jamey Keaten and Elaine Ganley in Paris, Christopher S. Rugaber in Washington, and Tom Hays in New York contributed to this report.

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