Even if Thailand strictly follows the IMF's tough prescription and the pain of macroeconomic adjustment, the chances of economic recovery remain bleak because foreign capital might not return, scared off by region-wide financial contamination, analysts warn.

Criticism of the International Monetary Fund's handling of the economic and financial crisis in Thailand, not to mention South Korea and Indonesia, is mounting.

According to analysts, events in recent months are proof that these countries are quickly heading down the economic drain.

''There is no guarantee that Thailand will recover if it is a good student of the IMF, because this region is already contaminated,'' said a respected Thai banker.

''Foreign capital has flowed back to safe havens in Europe and the United States.

''The IMF, being an international organisation without nationality, does not care who owns what. What it sets out to do is to have us clean up our house and put everything in order, then wait for confidence and foreign capital to return.''

That foreign capital might not return easily, he warned, even if Thailand rigidly follow the IMF's programme -- essentially fiscal spending cuts, high interest rates to defend the currency and tax hikes to curb consumption and raise government revenues -- and gets hurt along the way.

Phisit Pakkasem, a former secretary-general of the National Economic and Social Development Board, has openly criticised the IMF for prescribing an outmoded treatment for Thailand.

''Its measures are more appropriate for treating countries with heavy public sector debt. Thailand's problem has to do with the private sector debts which affect the public sector,'' he said.

He called for a re-negotiation of the conditions Thailand entered into with the IMF, particularly the requirement for a budget surplus equal to one per cent of gross domestic product.

''Thailand had been running a budget surplus for 10 years in a row before posting a deficit in the previous budget. It won't matter much if we run a budget deficit of two to three per cent of GDP,'' said Phisit, now chairman of Thai Investment and Securities Plc and a director of the Asian Development Bank.

Finance Minister Tarrin Nimmanahaeminda is due to go to Washington DC this month to discuss with the IMF the possibility of adjusting Thailand's financial and economic reform programme, following the sharp deterioration in the economic environment.

What specific requests Tarrin will make have not been revealed, but authorities have signalled that the fiscal bonds should be loosened to give the sinking economy a chance.

A fiscal deficit would help stimulate the economy at a time when the private sector is facing bankruptcy. The economy threatens to plunge into full-blown recession this year due to the tight fiscal and monetary policy prescribed by the IMF, with growth plunging into negative territory.

Phisit said the IMF should try to prevent the credit standing of countries in the region from deteriorating to the level that they would be shut out from borrowing on international financial markets.

''You cannot just look on Thailand as an isolated problem, because it is a regional problem,'' he said. The economic superpowers should also step in to help.

A strategist at a big bank was quoted as warning that big Thai companies are taking big hits and defaulting on their loans and that this could trigger a broader economic meltdown.

''If foreign capital does not to return in about six months, I guess we'll be in a very big, big trouble,'' he was quoted as saying.

The Asian Wall Street Journal yesterday ran an article featuring an emerging conflict in the line of thinking between the World Bank and the IMF over the macroeconomic prescription for Asia.

''These are crises in confidence,'' Joseph Stiglitz, chief economist at the World Bank and formerly US President Bill Clinton's top economist, was quoted as saying.

''You don't want to push these countries into severe recession. One ought to focus ... on things that caused the crisis, not on things that make it more difficult to deal with.''

The Journal said Stiglitz's critique departed from the usual closed-door disagreements between the two institutions, which are aiding Asia jointly. Relations were so strained that Stiglitz and his team were to meet IMF representatives for discussions as early as next week.

The Journal added that underlying the tension was an increasingly serious debate about the appropriate economic policies for South Korea, Indonesia and Thailand.

The IMF was not forcing on Asia the same austerity it pushed on Latin America in the 1980s; more than ever, it was focusing on governance and financial-sector weaknesses.

But it was arguing unapologetically that countries facing falling exchange rates and an outflow of foreign money must raise interest rates and shrink budget deficits, or even run surpluses.

Emboldened by the lack of IMF success so far, critics warn that such policies are counter productive because they may cause bankruptcies and deeper-than-needed recessions, the Journal reported.

''We should pressure the IMF to forsake its 'tough love' fiscal and monetary austerity remedies for Asia,'' Barton Biggs, chairman of Morgan Stanley Asset Management, argued in The Wall Street Journal's editorial pages earlier this week.

''Instead, the IMF should implement programs that enable the Asian countries to grow out of harm's way.''

The Journal also quoted Treasury Undersecretary David Lipton supporting the IMF approach, which ''focuses on structural changes that can help economies attract and retain capital and perform better ... not on austerity to reduce demand.''