The call comes in the wake of the crises in emerging market economies and after the BBC found evidence in Russia of waste and theft of IMF grants.

Professor Richard Layard of LSE: 'There has to be a body like the IMF who can step in'

Mr Blair, currently chairman of the Group of Seven (G7) leading industrial nations, will make the call in a speech in New York.

He will say the organisation charged with overseeing the world's financial stability has failed in its mission over the last year.

Downing Street sources say the spread of financial turmoil from Asia to Russia and Latin America shows the IMF and World Bank are not up to the job and the UK will present an agenda for change this week.

Blair to lead criticism of IMF

The Financial Times reports that UK Treasury officials will follow up Mr Blair's speech with a plan to partially merge the IMF and World Bank, force big private players like George Soros to be more open and accountable and demand nations publish their foreign currency exposures and long- and short-term debt positions each month.

An investigation by the BBC's Jonathon Charles revealed that Russia's chief auditor had uncovered widespread abuse of IMF funding grants to the country.

Venyamin Sokolov, director of Russia's chamber of accounts, says that billions in IMF aid from the West was lost through corruption or used improperly.

His comments come as the International Monetary Fund is considering whether to lend Russia another £3bn in the wake of the latest economic turmoil there.

IMF impotence

However, the allegations involve funds for individual projects, not the aid sent by the IMF to help the government re-establish financial stability in the wake of the rouble crisis and threat of debt default.

This is important to remember in discussing any revamp of the IMF, said Professor Richard Layard of the London School of Economics.

He agrees on the need for an overhaul and says the IMF or a similar body must be able to stop the runs on currencies which precipitated the Asian and Russian crises.

"The Russian government had less debt than the Maastricht criteria, no balance of payments problem, low inflation, an improving budget and it was all washed away in a run on the currency."

However, despite those fundamentals the currency run now sees the economy in crisis, he said.

Professor Layard said the IMF had exposed Russia to its currency crisis by forcing the relaxation of capital and currency controls too early.

He said an organisation, possibly backed by the world's central banks, with more funds than the IMF at its disposal is needed to act as a lender of last resort to solvent governments.

The IMF is due to hold its annual meeting at the end of this month where its response to the last year's financial turmoil will be high on the agenda.