But Michael Brown’s decision has not come as a complete surprise.
Just one week after President Bush praised ‘Brownie’ on September 2 for “doing a heck of a job” in responding to America’s worst-ever natural disaster, the FEMA chief lost onsite command of the relief effort to US Coast Guard Vice Admiral Thad Allen.
“Michael Brown’s departure from FEMA is long overdue, and his resignation is the right thing for the country and for the people of the Gulf Coast states,” US House of Representatives Democratic leader, Nancy Pelosi, said on hearing the news.
Amid the mounting criticism that government agencies were slow and chaotic in their initial handling of emergency relief after Katrina struck on August 29, the US media has rounded on the FEMA director suggesting he lacked the necessary expertise for the job.
According to reports, the White House has selected a top FEMA official with three decades of fire-fighting experience to step in as acting director.
David Paulison has been tipped to take Mr Brown’s place and is said to have worked in the relief effort after Hurricane Andrew in 1992 among others.
President Bush has also been struggling to regain lost ground with the US public as his popular approval dropped to new lows at the weekend.
Forced onto the backfoot, he has dismissed claims that relief was slow in coming because many of the victims were African Americans, and that too many troops have been sent on overseas missions such as Iraq.
His third trip to the devastated Gulf Coast brought him into contact with New Orleans which remains 40 percent submerged by putrid, contaminated floodwaters for the first time.
The number of confirmed deaths has risen above 500, with 297 people found dead in Louisiana and at least 214 in neighbouring Mississippi.
An unknown number of people have stayed on in the city, despite being urged to leave and join hundreds of thousands of others being housed in temporary shelters across the country.
Much of New Orleans’ infrastructure has been destroyed, and as pumps gradually drain the streets of water, business owners are being allowed back in to assess the extent of the damage.
It is estimated the cost of Hurricane Katrina could range from US$100 billion to US4200 billion (A$131b to A$262b).
The states of Louisiana, Mississippi and Alabama, which bore the brunt of Katrina’s fury on August 29, have set to work on a multi-billion dollar economic recovery bill aimed at tempting businesses back to the disaster zone.
“All three states are working together to mould something that’s going to embody an investment tax credit, a relocation tax credit, an accelerated capital investments tax schedule,” Michael Olivier, State Secretary for Economic Development said.
Mr Olivier said a massive bond issue, along the lines of that which followed the September 11 attacks, will be included in the package.