James Wolfensohn, president of the World Bank, is to take on the board of the finance giant in order to force developing countries to improve their human rights records.
The radical shift in the lending criteria for the Washington-based development bank was signalled by Mr Wolfensohn in a talk he gave in London on Thursday.
In front of a small group of invited guests at a Greenpeace-sponsored forum, Mr Wolfensohn said he was going to press for the World Bank to include human rights issues in its future lending criteria.
This would mean that any project funded by the World Bank would have to be sponsored by countries that honoured international conventions on human rights. There is a fear within development circles that this would exclude projects in places as diverse as the Democratic Republic of Congo and China.
"The institution has up till now refused to deal with its activities using a rights-based approach," said Mr Wolfensohn. However, he added that any attempt even to raise the issue had resulted in serious opposition from members of the board of the bank, who include representatives of countries from the UK to Chile.
"If I talk about a rights-based approach, I get letters [from board members] saying I have exceeded my authority because we are a financial institution," he said. "Many countries on our board have signed the declaration of human rights but say this is not the job of a financial institution."
Mr Wolfensohn, who has been president of the World Bank for nine years, said he thought an opportunity existed to change the opinions of members of the board. He may be supported in this by the UK's representative, Hilary Benn, the International Development Secretary. Sources close to Mr Benn said he supported the idea that the World Bank should take account of human rights but would want to see full details of any proposals.
Mr Wolfensohn would not say when he wants to bring his plan forward but admitted he was nervous about opening up the discussion. "I want to bring this to the board and win. I don't want to bring it up and lose."
Mr Wolfensohn is already in the middle of a battle at the bank about whether it should adopt the findings of the Extractive Industries Review, written by Dr Emil Salim, Indonesia's former environment minister, and published last month.
The review suggests that the World Bank should consider pulling out of the funding of oil, coal and gas projects, unless the people directly affected give their consent for them to go ahead. This proposal has been opposed by industry and by governments on the grounds that it would allow a minority to overrule the will of a democratically elected government.
Mr Wolfensohn said he had not decided whether to support the adoption of the review but indicated that he might threaten to quit if the bank's board does not support him.
"I could retire or I could do something more effective. In the next two months I probably will decide," he said.