The account has been largely corroborated by five western officials familiar with the cases, who said that Karzai and his government have repeatedly thwarted prosecutions against high-ranking officials, the paper reported.
'Stalling and stalling'
One US official, speaking on the condition of anonymity, said that Afghan prosecutors had prepared several cases against officials suspected of corruption but Karzai was "stalling and stalling and stalling".
Al Jazeera's Hoda Abdel-Hamid, reporting from Kabul, the capital, said Afghanistan's attorney-general, Ishaq Aloko, had told a news conference on Sunday that Faqiryar "is well past retirement age - he's 72".
"Apparently retirement age in Afghanistan is 65. His term had been extended for a few years, but he was long overdue for his retirement," she said.
"According to the attorney-general, this retirement was signed about two weeks ago, but because of the bureaucracy it was delayed in conveying the message to the prosecutor."
Corruption allegations made by the prosecutor are nothing new, said our correspondent.
"Anyone you'll speak to will tell you that there is corruption at all levels. The UN issued a report saying that bribery equals to one-quarter of GDP of Afghanistan and that goes all the way from the bottom ... to the president and the cabinet," she added.
Faqiryar said his prosecutors had opened cases on at least 25 current or former Afghan officials including 17 members of Karzai's cabinet, five provincial governors and at least three ambassadors.
Umer Daudzai, Karzai's chief of staff, disputed the allegations and said his government was trying to stop corruption cases from becoming "politicised".
"I strongly deny that the president has been in any way obstructing the investigations of these cases," Daudzai told the Times. "On the contrary, he [Karzai] has done his bit."
Cases did not proceed
None of the cases have been able to proceed, Faqiryar said. He did not elaborate on the cases specifically, nor did he say if Karzai himself was involved in all of the cases or if the orders were coming from Aloko or other ministers.
Afghanistan's government, financed with money from the US and Nato, is "widely regarded as one of the most corrupt in the world", the Times reported.
Earlier this month, Karzai intervened to stop the prosecution of Mohammed Zia Salehi, one of his closest aides, after investigators said they had wiretapped conversations where he demanded a bribe from another Afghan seeking his help in ending a corruption investigation.
Haroun Mir, an Afghan political analyst, told Al Jazeera that Karzai's administration has been struggling with corruption since his re-election.
"Instead of taking measures in the fight against corruption to improve his image, he [Karzai] has dismissed [Faqiryar]," Mir said.
Power brokers, including those who helped in Karzai's election, have virtual immunity from prosecution, he said.
"I don't think Karzai will be able to take any action against these powerful people in the country," Mir said.