The credit crisis has been dragging on for a year, with no end in sight, so it's no wonder troubled financial institutions and Western governments are taking more interest in sovereign wealth funds (SWFs).

These largely anonymous and controversial government funds, which have built up tens of billions in dollars in cash reserves from oil revenues, suddenly appear to be potential saviours for companies in these credit-starved times. So it was that Barclays raised £4.5 billion last month in part from the Qatar Investment Authority and just last week US giant Dow Chemical raised $1 billion from a similar Kuwaiti fund to buy Rohm & Hass.

The money is all well and good. But the big issue for many is that these SWFs are closely tied to national governments and appear to lack transparency. That has prompted serious talk among Western governments about imposing restrictions or controls on these funds. Critics fear the economic clout of SWFs will lead to political influence in their host countries.

Now the author of a new report, the first to look in detail at the strategies and ambitions of SWFs, has warned Western politicians that protectionism could spark off tit-for-tat trade wars that could drag down the world economy for years.

"A political response, rather than one based on real economic concerns, would affect everyone," said Emad Tinawi, vice-president of the corporate advisory firm Monitor Group.

He warned that if the US curtails the fund's activities, other countries will retaliate. "That includes countries in the Middle East and others home to sovereign wealth funds. Protectionist policies in Washington in the 1930s sparked an economic crisis and the world took decades to recover," he said.

Sovereign wealth funds have been around since the Kuwait Investment Authority was established in 1953, but have become more visible as their coffers have swollen from oil revenues or massive trade surpluses.

The 29 sovereign wealth funds monitored by Morgan Stanley are worth almost $3 trillion (£1.52 trillion), with the Abu Dhabi Investment Authority, the biggest, worth about $875 billion. The IMF estimates that they will be worth $12 trillion by 2015.

The credit crunch has focused even greater attention on SWFs. It's not just Barclays but also UBS and Citigroup, among others, that have tapped foreign funds for major cash injections. The phenomenon is not limited to banking. QIA holds diverse stakes including the London Stock Exchange and nursing group Four Seasons Health Care, plus the housing development planned near the Royal Hospital in Chelsea.

Singapore's Temasek, with a long-standing holding in Standard Chartered, also controls 14.7% of ABC Learning, the Australian company that owns Busy Bees Britain's biggest nursery-school chain.

The strongest political attacks on SWFs came in 2006 with Dubai's DP World takeover of P&O Ports. Where P&O had been running ports on the US eastern seaboard for years, the prospect of Arab control sparked a firestorm of political outrage that led to measures that forced DP Ports to offload the assets.

"Opposition to something like this has its roots in ignorance," argues Tinawi. "That is why this report was so needed. There has been a lot of speculation but no real information about what SWFs are and what they do."

The Monitor Group report finds that fears about SWFs are unfounded and that they tend to be long-term investors with no ulterior motives. While SWFs have changed their behaviour, this is largely due to opportunistic investments thrown up by the credit crisis, it says: "But they do not appear to be active in ways that threaten the economic or national security of foreign countries where they invest."

SWFs are more willing to take controlling interests in their investments, the report concedes. Since 2000, SWFs have acquired controlling stakes in half of their transactions but the majority have been in emerging markets and in sectors that are not politically sensitive.

Britain has been the most relaxed of all developed economies about SWF investment, with chancellor Alistair Darling telling SWFs that the UK was open for business. Gordon Brown has already begun talks with Abu Dhabi, Qatar and the United Arab Emirates about investment opportunities in UK energy, including a new generation of nuclear power plants.

Nor has all US reaction has been hostile. Treasury Secretary Hank Paulson was at pains on a recent trip to the Gulf to reassure his hosts that America was still welcoming but it is not clear how big an issue SWFs will be in an election year. "I think John McCain has been a little more reserved and cautious on this issue. Obama's rhetoric has been more troublesome on free trade and other issues," said Tinawi. "But we must remember Bill Clinton did the same thing early in his campaign."

Assessing the Risks: the behaviour of sovereign wealth funds in the global economy, is published by the Monitor Group