Mervyn King, governor of the Bank of England, warned yesterday that the International Monetary Fund (IMF) could "slip into obscurity" without radical reforms.

Making his own proposals to restructure the institution during a speech in India, Mr King proposed granting the IMF's managing director and staff more independence and power to monitor and criticise individual countries' economic policies.

He also suggested removing the day-to-day duties of the IMF's executive board, which is controlled by member countries.

Mr King's speech marked a radical departure from the incremental reforms proposed by Rodrigo Rato, IMF managing director, and many senior policymakers. His speech is likely to gain private approval from many within the IMF. In national capitals, however, there is likely to be resistance to any proposals which might dilute the influence that representation at the fund in Washington is considered to bring.

Criticising the year-long debate leading up to the IMF's annual meeting in Singapore later this year over individual country's voting powers on the board, Mr King said: "Even if an agreement is reached, what would be the purpose if the Fund remained unreformed?"

Instead, Mr King called for the international community to create a new fund that would pass judgment on the effects of one country's economic policies on others. At the moment, he said, this process was hamstrung by the IMF's staff having insufficient independence to publish their views on economic policies with clarity, particularly when addressing "divergences between stated objectives [ of countries] and actual policies at the national level".

Mr King proposed replacing the existing board, which has permanent delegations in Washington, with a non-resident board that would meet six or eight times a year in a supervisory capacity. This, he said, would stop "expensive micro-management".