Joseph Ackermann never thought that the 20 months between his being anointed dauphin to Rolf Breuer as head of Deutsche Bank in September 2000 and the handover of power in May 2002 would be an easy ride.

But what should at least have been an orderly process in the best tradition of German corporate succession has turned into an unseemly muddle, with supporters of both men locked into a cycle of recrimination and counter-recrimination.

Instead of being able to wait in the wings for his cue, Mr Ackermann has in recent weeks been caught uncomfortably in the arc-lights of corporate Germany, as a very public dispute about the future of the country's largest public sector bank rages around him.

The trouble began three weeks ago at a gathering for Deutsche Bank's 50 most senior executives in the small town of Kronberg, outside Frankfurt. The meeting was explosive by the standards of most German corporate retreats. Instead of the usual back-slapping, executives turned on Mr Breuer, criticising him for failing to tackle Deutsche's falling share price and for not being more aggressive in cutting costs.

Crucially, some executives defied convention and called for Mr Breuer to step down early and make way for Mr Ackermann, Swiss-born head of the bank's corporate and investment banking division. Throughout the meeting, Mr Ackermann remained loyal, speaking only once and with considerable diplomacy. To some, he seemed to be subscribing to Swiss bankers' favourite proverb that "silence speaks volumes"; to others he was simply sticking to his stated policy of biding his time.

When news of the meeting leaked on the morning Mr Breuer was in London to see investors, the Deutsche boss was said to be furious. For all Mr Ackermann's tact, the impression of a man in a hurry was encouraged a week later when he made the admission that he was anxious to reform the traditional German management structure.

He said he preferred a leaner executive committee run on less consensual lines, with the chairman of the committee resembling more a strong Anglo-Saxon chief executive than the current "speaker of the board", who is legally only first among equals. Mr Ackermann's intrusion into the highly political debate over German corporate governance was a surprisingly gauche move for a man who has earned a reputation for his deft handling of Deutsche Bank's vicious internal politics.

In fact, Mr Ackermann's management style has always needed to be cautious, given the turmoil in Deutsche's investment bank when he took charge of it three years ago. An unknown quantity among most of his new colleagues, he arrived from Credit Suisse amid considerable scepticism. His manner made the going hard at first. His Finnish wife is ebullient but his own considerable charm is sometimes slow to show itself, which can make it hard for him to put people at their ease.

One of the early sceptics was Edson Mitchell, the former Merrill Lynch banker who headed global markets. He resigned shortly after Mr Ackermann's arrival and was set to move to Warburg Dillon Read, as UBS Warburg was then called. However, Mr Mitchell was won round and became one of Mr Ackermann's key lieutenants until his death in an air crash a year ago.

Mr Ackermann quickly won the loyalty of other bankers by tidying up an unhappy business built on the shaky foundations of the botched Morgan Grenfell acquisition and a string of misguided and costly hires. The $10 billion (€11 billion) acquisition of Bankers Trust two years ago also earned him plaudits.

But it was the way Mr Ackermann reached decisions and implemented them that really impressed his new colleagues. "He didn't come running in and say, 'I'm from Zentral and you're going to obey me'," says one. "When he's decision-making he gets out a piece of paper, draws diagrams and writes things down and works through the issues with us."

Although Mr Ackermann believes in working through committees - a habit that is anathema to most investment bankers - he is rigorous about devising a firm action plan at the end of each meeting, which is reviewed in detail at the start of the next one. "He listens very carefully to what everyone has to say and then he decides," says a colleague, adding that behind his easy smile are teeth of steel. "His decision is final. He rarely raises his voice but I have never seen him lose an argument."

Mr Ackermann (53) has played power politics before joining Deutsche: during his 19 years at Credit Suisse. Ultimately, he lost. Accounts differ on why he fell out with Rainer Gut, the Credit Suisse chairman, but what is clear is that the clash deprived Mr Ackermann of the opportunity to succeed Mr Gut, a role for which he had been groomed.

Having built up Deutsche's investment bank into a serious and profitable contender, of the likes of Goldman Sachs, Merrill Lynch and Morgan Stanley, Mr Ackermann's power base looks secure. But some executives believe it is not in his interests to agitate against Mr Breuer because Mr Ackermann needs him to sponsor some of his more controversial plans, such as changes to the management structure.

Broadly, Mr Ackermann wants to turn Deutsche into something resembling Citigroup, the giant US financial services group. But he also has pressing issues to tackle that will require political smoothing for which, as a Swiss in Germany, he is ill-equipped. These include cutting Deutsche's bloated cost base, especially in corporate banking and in asset management. That will mean cutting thousands of jobs. These moves alone will not play well in Berlin, but the politicians will like them even less when they realise they imply a significant shift, outside Germany, of power within a bank that many still see as a national emblem. Already, more than 60 per cent of the bank's earnings come from investment banking operations, which are based in London and New York, while half the bank's 98,000 employees live and work outside Germany.

Merging with another bank could provide the backdrop Mr Ackermann would need to undertake the transformation of Deutsche that many analysts think it needs. Talks have already been held with Lloyds TSB of the UK - though they came to nothing - and Deutsche's name has often been linked with that of Merrill Lynch.

But many inside and outside the bank believe that if Deutsche does not want to merge with a rival, Mr Ackermann will need the diplomatic help of a German native. Mr Breuer is believed to support Mr Ackermann's plans for a more executive management structure, and is working with him on this. "I think he needs to get as much done as possible with Breuer there as the German, because once he takes over he will need to keep a low profile for the rest of the year," says one banker.

Some colleagues believe the fact that Mr Ackermann is Swiss could work against him. "On the one hand the Germans view him as a foreigner; on the other hand, culturally he is so close to them that he doesn't have the cultural leeway that, say, an American would to come in and say 'right, to hell with that'," says one.

So far, Mr Ackermann has received backing from Hilmar Kopper, chairman of the supervisory board. But if, as planned, Mr Breuer succeeds Mr Kopper next year, the relationship between Mr Ackermann and Mr Breuer may become even more important.