Two or three centuries after the state-backed colonists of the West seized control of the poorest countries on the map, a kind of reverse imperialism is starting to take place. Now the sovereign wealth funds of countries once seen as impoverished and backward are buying beefy stakes in some of the biggest and most influential companies of the West.

Many see it all as overwhelmingly positive, another aspect of the globalisation that has created so much wealth in the past few decades. Emerging country savings are coming to the rescue of Western banks which would otherwise be on the brink of disaster, strengthening economic and diplomatic ties.

It is a benign matching of supply to demand. Western banks are suddenly desperate for cash to shore up their balance sheets. Asian and Gulf governments have it by the bucketload and are rightly negotiating attractive terms for their timely and ballsy largesse. Few if any Western fund managers would be willing or able to sign cheques for $5 billion at a time.

According to this thesis, both sides will benefit - in the same way that the “recycling of petrodollars” from Opec countries to the West in the 1970s softened the economic blow of the quadrupling crude oil price.

But others are more suspicious. Most sovereign funds are opaque and highly secretive. They are under the control of non-democratic regimes which may turn out to have more sinister goals than just passively banking their dividends. To them, Anglo-Saxon style business, with its emphasis on transparency and disclosure and notions of shareholder equality, is alien.

Unions fear that sovereign funds, unaccountable to workers thousands of miles away, could introduce a more aggressive tone into Western companies. Employees at Cadbury Schweppes have attacked Qatar's fund for backing the activist investor Nelson Peltz, who is laying siege to the confectioner.

The concern is partly due to the sheer firepower of sovereign funds but also to the speed with which the balance of economic power between East and West seems to be shifting. If Merrill Lynch completes its deal with Temasek, no fewer than four of Wall Street's most powerful institutions will have agreed to a sov-fund injection in just weeks.

It was less than two years ago that US politicians were voicing the most vociferous mistrust of Dubai's DW Ports because of its planned takeover of US harbours, in the end blocking the deal. China National Offshore Oil Corp was also forced to retreat in its attempt to take over the Californian oil company Unocal.

There has been much less vocal opposition to the string of recent bank deals. President Bush said this week: “I am fine with capital coming in from overseas to help to bolster financial institutions.” The more relaxed tone is partly down to the size of the stakes, in most cases less than 10 per cent. The sov funds have usually waived any board representation. Their ability to influence company decisions should not be underestimated, but they are a long way from control.

The other reason is the scale of the problem faced by the recipient banks. Badly holed by their sub-prime losses, some cannot be picky about their rescuers. Cash is being hoarded, liquidity is thin and finding domestic help on the scale required is no easy matter. Only the sovereign funds of the Middle and Far East, largely untouched by the credit crunch, have the ready cash.

Politicians and regulators who in happier financial times probably would have kicked up a stink are glad to see the ravaged balance sheets of Wall Street's finest patched up with the minimum of fuss.

But some existing shareholders are uneasy, as the revolt at UBS reveals. There seems to be a mix of concerns here. Some investors feel they have not been told the full story about the losses and want an independent audit and investigation. Others are concerned about the circumstances of the rescue deal done with a Singaporean fund and an unnamed Middle Eastern investor. Both the anonymity and the terms have created mistrust. The 9 per cent coupon UBS is paying on the new securities before they convert into ordinary shares is mouthwatering. Citigroup's willingness to pay 11 per cent to Abu Dhabi was even more eye-popping.

Some shareholders are also miffed that they weren't given the chance to invest first. Pre-emption rights, the principle that existing shareholders are given first dibs in any new share issue, have been thrown out of the window.

It may be that the sovereign funds have got a raw deal — if the credit crunch produces further writedowns next year, for example. China's investment in Blackstone has left it nursing burnt fingers thus far. But behind the rhetoric lies the nagging realisation in the west that, for now at least, we need the sov funds more than they need us.

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