Volcker, who heads Andersen's oversight board, said he has no plans to take the firm's helm.

C.E. Andrews, head of the worldwide audit practice, and Lawrence Rieger, another senior partner, will lead the process of making Andersen a purely accounting firm until a new U.S. board is put in place.

Volcker's announcement at a press conference Friday came a day after the firm's senior partners held a five-hour teleconference and decided to split off the company's non-auditing businesses and focus entirely on auditing.

"We want to save the core of the auditing business," Volcker said, providing "quality auditing, unconflicted auditing."

The worldwide company's top exec, Joseph Berardino, resigned [last week]. Partners are expected to meet [this] week in London to name his successor.

Andersen was indicted March 14 on obstruction of justice charges stemming from its role in collapse of energy giant Enron, leading to the biggest bankruptcy in U.S. history. Since January, Andersen has lost more than 70 big-name U.S. clients. Friday, it lost consumer credit data service Equifax and energy company Xcel.

Andersen affiliates in Japan, China, Hong Kong, New Zealand and Russia have also joined rival firms, while its Australian business Friday agreed to combine with Ernst & Young.

In New York, Andrews said he was "confident we can retain a solid core of our clients" for the new firm, which Volcker jokingly offered to rename "New Andersen."

Volcker said that about 60 percent of Andersen's partners are in non-auditing areas that would likely be severed, along with many employees. There are currently about 28,000 U.S. employees.

A company statement separately said there would be layoffs, but that no decision has been made about the number.

The firm hoped the Volcker plan would persuade the Justice Department to drop its suit, but that is appearing unlikely.

In the oversight board's second report issued March 22, Volcker wrote the "serious concerns" that led to the indictment require "appropriate change in the internal direction and leadership of the firm."

He commented Friday, "That is precisely the path the SEC (Securities and Exchange Commission) and Justice Department should be concerned about."