Mr James Wolfensohn is the ultimate global networker. His charm, intelligence and wealth have given him easy access to the world's power elite. According to many who have accompanied him around the world, the Australian-born financier, who is president of the World Bank, never seems more at ease than when he is mixing with the great and powerful.

His connections with the top of the Democratic party in the US helped him into his present job. But he has kept his connections with the Republicans. However, if an internal memo made public this week is to be believed, Mr Wolfensohn is a terrible boss. The memo blames his management for morale having reached low levels at the World Bank's headquarters in Washington DC.

"He does not welcome criticism or tolerate dissent, be it from the board, or the managers or the staff association. Managers at all levels live under fear. Many have learnt that it serves them to agree with him. He is thus isolated from reality," says the memo from the bank's Middle East and North African department, purporting to represent a consensus view within the department.

Internal ructions at the World Bank may not have attracted much attention in the past. But the bank, the largest source of official finance for developing countries, is now a controversial institution. Along with its sister organisation, the International Monetary Fund (IMF), it is regarded by some environmental and political activists as an unaccountable body that imposes its values on developing countries.

Judging from the internal response to the disclosure of the memo this week, most bank staff do not regard Mr Wolfensohn as a tyrant. But, while they say he has done a good job in projecting the image of the bank around the world, many think he has performed less well in fitting it to carry out its newer responsibilities.

His critics accuse him of being a follower of fads. Under his tenure, the bank expanded its focus of attention to take in corruption, religion, culture and the Internet. The bank has always lacked focus, they say, but now it is worse than ever.

Ms Ann Pettifor, who headed the Jubilee 2000 campaign to win forgiveness of poor country debt, credits the bank's president for pushing for debt relief in 1996 and eventually prevailing over a recalcitrant IMF. But she says he has not made the transition from running his own boutique investment bank to managing a big public organisation filled with civil servants.

Ms Pettifor says he finds it hard to distinguish between the institution and himself, referring to the institution as "my bank". According to long-serving officials at the institution, Mr Wolfensohn is the most intelligent and dynamic head of the bank since Robert McNamara, the 1960s US defence secretary who transformed it. The task Mr Wolfensohn set himself was to overhaul it once again.

In one sense, he has achieved that: since he took over in 1995, there has been a complete change of senior management and turnover of close to 20 per cent among more junior ranks. Yet officials say some flaws from the McNamara era remain. Staff are still rewarded for pushing loans through its governing board, even if they have not thought much about the longer-term consequences to the country involved.

Some officials say Mr Wolfensohn has suffered as a manager from not having a more effective counter-balance within the senior ranks. Mr Wolfensohn wanted no number two, along the lines of Ernie Stern, who in effect ran the bank under the eyes of the previous three presidents. One former World Bank official says Mr Wolfensohn's refusal to share power reflects his surprising lack of self-confidence, despite achievements such as being an Olympic fencer and a proficient cellist. In taking over the bank, Mr Wolfensohn also has found himself at the head of an organisation with its own profound insecurities. Most of its staff are in Washington on a US visa that means they have to leave the country within weeks of losing their jobs. Moreover, while many joined the bank with a sense of a mission to help the poor, they feel weighed down by its bureaucracy. What really matters is whether the bank is fulfilling its mission of helping the world's poor. The bank says it is much better equipped now for that task. But there are many who question whether Mr Wolfensohn has been a wholly positive influence.