A special US Congressional commission is expected next month to recommend a radical reduction in the roles of the International Monetary Fund and the World Bank.

It is likely to propose that the IMF focus on short-term finance to resolve crises in emerging economies, and that the World Bank shift towards providing poor countries with grants rather than loans.

The commission, chaired by Mr Allan Meltzer, an economics professor at Carnegie Mellon University, is also expected to recommend the abolition of the International Finance Corporation, the World Bank's private sector arm, and MIGA, its political insurance unit.

It is also likely to call for the World Bank to pull out of Asia and Latin America, leaving the ground to two regional institutions, the Asian and the Inter-American Development Banks.

The body, officially titled the International Financial Institution Advisory Commission, was established by Congress last year to report on the workings of the international institutions. The broad thrust of the commission's likely conclusions has been widely circulated in Washington, though the findings have only just reached the draft stage and may change.

Its 11 members are due to meet next week to vote on the findings and it is not yet clear how large the majority voice will be.

The recommendations are based on the large overlap the commission has found between the roles of the IMF and World Bank and between the World Bank and regional development banks.

The political impact of such findings, which will be reported to at least five Congressional committees and the US Treasury, are not yet clear. However, the commission's work may open the way for increased pressure from the US Congress on the administration to push reform in the institutions. Congress is expected to vote this year on related legislation, for example, to provide US funding for debt relief for the poorest countries in Africa.