Bernard Madoff pleaded guilty yesterday to orchestrating the biggest investment fraud in Wall Street history and was jailed to await a sentence that could keep him in prison for the rest of his life, media reports said.

As some of his victims looked on in the courtroom, the former Nasdaq stock market chairman admitted to a long-running, worldwide Ponzi scheme that he knew was criminal from the start but thought would end quickly.

"I am painfully aware that I have deeply hurt many, many people," including family, friends and associates, Mr Madoff said before US Judge Denny Chin in Manhattan federal court. It was the first time he had spoken publicly of his crime.

"When I began my Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme," said Mr Madoff.

The money manager’s fraud has hit investors in private banks, hedge funds, investment firms and charities. Among the banks and institutions affected by the massive fraud are Union Bancaire Privée, Santander, Man Group and Bramdean, the UK investment house.

The scam has prompted calls for more focus by wealth managers on due diligence over investments and for greater use of independent administrators over assets. The swindle has cast a harsh light on securities regulators for failing to uncover the scam, even after a whistleblower brought it to the attention of the US Securities and Exchange Commission in May 1999.

In the court hearing yesterday, Mr Madoff did not mention the size of the scheme, but prosecutors have said it amounted to as much as $65 billion over 20 years and involved more than 4,800 client accounts.

Mr Madoff said that shutting down the scheme, in which early investors were paid with money from new ones, proved impossible. "As the years went by, I realized that my arrest and this day would inevitably come," he said.