Mr Robert Rubin, US Treasury Secretary, yesterday said it was time to consider realigning the constituencies within which countries were grouped at the International Monetary Fund, a move that would see Europe lose influence in the global economic watchdog.

At the IMF's "interim committee" of finance ministers and central bankers, he also sounded a note of caution on the world economy, warning: "The balance of risks remains on the downside."

It was important that Europe redouble its efforts to increase domestic demand, he said.

Mr Rubin said his proposal to reshuffle the political representatives on the IMF's governing bodies "takes into account the changing dynamics of the world economy and provides an appropriate voice, in particular, for emerging market economies".

The IMF's 183 member countries are grouped into 24 constituencies, each providing an executive director on the IMF board and a member of the interim committee.

At present, European countries have eight of the 24 seats, far in excess of their importance in the world economy.

Mr Rubin's suggestion was swiftly opposed by Mr Hans Eichel, Germany's Finance Minister. He said emerging market countries could be given a greater role "without altering the present structure of the constituencies". But French officials said some re-jigging could be considered.

Mr Rubin's move reflects longstanding US frustration at Europe's over-representation in the international financial institutions. Grouping the European countries in a smaller number of constituencies would not affect their voting power but, as most IMF decisions are reached by consensus, many officials regard the number of chairs as more important.