* Sanford unfaithful to wife in affair with "dear friend"
* Quits as head of Republican Governors Association
* Miss. Governor Haley Barbour takes over as chairman (Adds publication of e-mails from governor, paragraph 18)
By Matthew Bigg
ATLANTA, June 24 South Carolina Governor Mark Sanford tearfully admitted on Wednesday he had been unfaithful to his wife, likely ending any chance he might be a Republican contender for the U.S. presidency in 2012.
Sanford resigned as chairman of the Republican Governors' Association and was replaced by Mississippi Governor Haley Barbour, another possible 2012 candidate.
"Any aspirations for 2012, if he had any, are certainly out of the question," said Robert Oldendick, a political scientist at the University of South Carolina.
Sanford's confession at a tumultuous news conference ended days of speculation over his whereabouts. After he disappeared last week, his staff first said he was hiking on the Appalachian Trail. It later emerged he had traveled to Argentina to be with his lover, leaving his family over Father's Day weekend.
"I spent the last five days of my life crying in Argentina," he said.
Shedding tears, Sanford apologized to his wife Jenny, his family, friends and staff when he made the shock announcement after returning on Wednesday from Buenos Aires.
Sanford's wife Jenny said she and her husband had been undergoing a trial separation and she regretted his actions and the damage it had done to their children.
But she added in a statement: "I remain willing to forgive Mark completely his indiscretions and to welcome him back."
Sanford explained how he had "developed a relationship" with a "dear friend" from Argentina. "It began very innocently ... in just a casual e-mail back and forth," he said.
"But here recently over this last year it developed into something much more than that. And as a consequence, I hurt her. I hurt you all. I hurt my wife. I hurt my boys. I hurt friends ... I hurt a lot of different folks."
With his tearful admission and groveling apologies, Sanford became the latest member of a fast-growing club of U.S. politicians who have confessed their sexual indiscretions before a public audience. [ID:nN24225280]
Sanford was one of several Republican governors seen as possible 2012 presidential candidates. Others include Alaska Governor Sarah Palin, Minnesota's Tim Pawlenty, and Louisiana Governor Bobby Jindal.
REPUBLICAN FORTUNES AT LOW EBB
As chairman of the governors' association Sanford has been one of the party's most visible spokesmen when its fortunes are at a low ebb.
Last week, Senator John Ensign, another potential Republican presidential contender in 2012, announced he had an affair and resigned from the Senate leadership.
Apologizing for his "selfishness," Sanford asked for "a zone of privacy" for his wife and their four sons.
He did not identify the woman in the affair, whom he said was separated from her husband and had two boys.
South Carolina senator Lindsey Graham offered his support to his fellow Republican: "I hope Mark will reconcile with his family and can continue serving as governor," he said in a statement. Sanford's final term as governor ends in 2011.
But raising pressure on Sanford, The State, South Carolina's main newspaper, published excerpts of e-mails it said were between the governor and the woman in which he professed love for her. Sanford's office did not dispute the authenticity of the e-mails, the newspaper said.
Sanford wrote in passionate terms to his lover, describing the physical and intellectual delight he found with her.
When U.S. media reported Sanford's whereabouts were unknown since last Thursday, and that even his wife did not know where he was, his aides had said he was hiking on the Appalachian Trail in the eastern United States.
They said he needed a break after a tough state legislative session. During his absence, some South Carolina politicians accused him of abdicating responsibility in state affairs.
Sanford flew back from Argentina to Atlanta early on Wednesday. He initially told a reporter he had changed earlier plans and decided at the last minute to go to Argentina and drive along its coastline.
Sanford gained prominence this year by opposing Democratic President Barack Obama's economic stimulus bill and rejecting $700 million of South Carolina's portion of the funds on grounds it would undermine the state's fiscal stability.
The state's Supreme Court ruled this month that the federal cash must be accepted. (Additional reporting by Andy Sullivan in Washington, Jane Sutton, Pascal Fletcher in Miami, Editing by Alan Elsner)
LONDON, Nov 7 Royal Bank of Scotland will announce on Tuesday it is setting up a compensation scheme worth more than 300 million pounds to help small businesses, amid allegations of malpractice at its small business restructuring division, sources said.
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