It was a tale of two businesses. Enron's aggressive trading arm, promoted by its former chief executive, Jeffrey Skilling, brought it stock market favour, a rocketing share price and its eventual demise.

The other part of Enron, which was largely concerned with developing and running energy generation and transmission assets, was scorned by Mr Skilling, who spoke of creating an "asset-light" company.

Some former Enron executives say that even before the company filed for bankrputcy last December, Mr Skilling's strategy had undermined the asset-owning business on which the company was built.

However, outside analysts and former executives argue that an important part of the company's non-trading business - its international strategy - was also in disarray.

The weaknesses of the company's international business reflected a pattern that has since emerged elsewhere in the company, where top executives were only loosely supervised and allowed wide freedom of action by Kenneth Lay, Enron's founder and Mr Skilling's predecessor as chief executive.

Mr Lay, who is scheduled to appear today before the Senate commerce committee (although according to his spokeswoman, he will exercise his right to silence under the Fifth Amendment), is depicted by former company executives as a distant leader, more interested in bolstering Enron's image and position than managing an increasingly complex company.

"He came in and saw things from a pretty big distance. He could give a speech about it, he could talk to politicians about it, but he could never have negotiated a contract," says one former executive.

If Mr Skilling came to personify Enron's trading business, the individual who created and managed Enron's international strategy was another Lay protegee - Rebecca Mark.

Educated at Baylor University, a quintessentially Texan school, Ms Mark rose from assistant treasurer at one of Enron's predecessor companies, Continental Resources, to head Enron International and spearhead its international strategy.

Described as sexy, tough and arrogant, Ms Mark developed a formidable reputation for pushing hard to seal a deal. She was also seen, for a long time, as having an important ally in Mr Lay. "He thought Rebecca walked on water," says Clare Spottiswoode, a former British gas market regulator who worked briefly with Azurix, an Enron subsidiary run by Ms Mark.

Ms Mark made Fortune magazine's list of the 50 Most Powerful Women in 1998 and 1999. By then, her career at Enron had peaked. That was clear once Mr Skilling took over in January 1997 as president and chief operating officer, making him heir apparent to Mr Lay.

Ms Mark, once viewed as a rival to Mr Skilling, was shunted aside in 1998 to head Azurix, a new Enron venture aimed at replicating in the water business Enron's supposed successes in the energy market.

According to some within the company, however, efforts to build Enron's international strategy were hobbled by Mr Skilling's obsession with building a business light on assets.

"Ken was enamoured with this trading business and Jeff's theories, and he was impressed by the way the stock market reacted to Jeff's business. From that point forward, it became difficult to continue to create the assets and run them well," says one former Enron executive.

"When Skilling became COO in 1997, he pushed the idea that we didn't need any assets. In the midst of building out this massive portfolio of operating assets, the president and COO says: 'We are not very interested in this'."

While that may not have helped Enron's international strategy, it was also a common perception that weakness in the company's international business was evident long before Mr Skilling took over in 1997.

"It was a disaster," says Carol Coale, an analyst for Prudential Securities in Houston who has followed the company for a decade. "I could never figure it out. It never fitted the strategic focus of the company. I viewed it almost as a sort of toy for Rebecca Mark."

After a successful investment in a gas-fired electricity generating project on Teesside, northern England, completed in 1993, Enron's international strategy of moving early into newly privatised energy - and later water - markets could claim few unalloyed successes.

Indeed, Enron appears to have fallen foul of the political sensitivities of its businesses around the world. The company's profits came, or were perceived as coming, at the expense of local consumers. Moreover, in some places, Enron was accused of bribery to win business, an accusation the company and former employees reject.

"The most obvious mistake was the Dabhol India project," says Ms Coale at Prudential, who downgraded the company to a "hold" in 1994 because of the risks associated with the planned $2.9bn generation plant.

Enron is putting the Dabhol plant, now 95 per cent complete, up for sale as part of its bankruptcy restructuring. However, its long-running dispute over the project - the first phase of which benefited from US government guarantees - became a source of friction between the US and India.

The World Bank concluded in 1993 that the plant was not economically viable and refused loans to support it. Some insiders saw Dabhol as misbegotten from the outset, a project that underestimated the political risks.

In the event, Enron ended up in disputes with the local and Indian governments and the utility that was meant to be buying its electricity. But some ex-employees say Enron's position worsened last year because of company mishandling.

"Enron escalated it and escalated it, trying to force the utility to give in. They took it to international arbitration and terminated the contract. . . . They now have a plant sitting on the ground that hasn't completed construction and hasn't a contract," says one former Enron employee.

"Instead of keeping their cool, they took it to the lawyers to get rid of. They didn't treat this as a business, they treated it as a transaction. That was the attitude that Jeff took about it from 1997 on. One simply can't do that with an asset portfolio. We were building businesses meant to last 50 years." India was not the only place Enron crossed swords with the World Bank. In Nigeria, an independent power project with Enron had to be renegotiated in 2000 after the bank concluded "it wasn't in the best interests of Nigeria", a World Bank official said.

In Ghana, the World Bank cancelled a $100m loan in 2000 to finance part of a $285m water project in Accra because it said there had been no competition in the awarding of the contract to Enron's Azurix subsidiary.

Peter Harrold, the bank's country director, who informed the government of its intention to kill the loan, said: "There were suspicions of corruption, and a draft schedule of payments by Azurix showed a $5m upfront payment."

The recipient was not specified, though Azurix executives, who deny bribery, said the payment was to the water company for taking over an asset.

The bank was also concerned about the cost of the water, which, at 95 cents a cubic metre, was at least one-third more expensive than the average in the capital area. After the loan was cancelled, Enron pulled out. Though five other water companies entered the open competition, Azurix did not.

"I concluded that the only way they thought they could get contracts was through the back door, not through the front," Mr Harrold said last week.

Indeed, to some, Azurix exemplified the flaws in Enron's entire international strategy. The company was created in 1998 to replicate Enron's international energy strategy in the worldwide water business. Ms Coale says the company's upper ecehelons were filled by Enron "rejects", such as Ms Mark. "They weren't part of the Skilling dream team," she says.

Azurix bought the UK's Wessex Water in 1998 for a generous £1.36bn (now $1.9bn), aiming to demonstrate the company's expertise in a new field. Enron then floated nearly a third of the company in June 1999 for $19 a share, raising $695m. By August, the shares were trading at $5; before the year was out, they were bought back by Enron at $7 a share.

"Enron turned their back on us, and the market turned their back on us and said 'We have a better use for our money'. There weren't any options. . . . We needed a lot of muscle," says a former Azurix executive.

Ms Spottiswoode, Azurix's senior vice-president of regulatory affairs in Europe, resigned after four months with the company. She had been expecting to take a more senior position in charge of European business, a position that Ms Mark had filled with her own candidate. But Ms Spottiswoode says she was also concerned by the high price investors paid at the initial public offering and felt Azurix was paying too much for water assets.

"We in the London office were fully aware at that time that we had overpaid for assets," she says. "The real concern I had in the IPO was that it was quite clear to the London team that the numbers that were being promised were impossible in the particular industry. I'm not saying that they didn't believe in the numbers, but we didn't."

Others at Azurix said the projections were discussed with McKinsey, the management consultants, and four investment banks. Moreover, the prospectus carried pages warning of the risks.

They say Azurix's French competitors, Vivendi and Suez Lyonnaise des Eaux, were determined to keep Azurix out of their own backyard in Europe by bidding aggressively for contracts such as the Berlin water privatisation. That was won by Vivendi with a bid 50 per cent lower than that made by Azurix.

But Azurix also came unstuck outside Europe. As it was anxious to kick off its share offering with a big new contract, company employees say it paid $439m - more than three times the next-highest bid - for a 10- year water distribution contract in Argentina's Buenos Aires province.

Enron wrote that investment off a year later, and the dispute is in international arbitration. Azurix was accused of delivering dirty water to some customers, while Azurix claimed the Buenos Aires government misrepresented its revenues and let employees clear the company's customer databases before handing it over.

"The feeling was that the deals were being done just to make deals," says Ms Spottiswoode. She says the company used off-balance-sheet vehicles to "generate deals where the numbers continued to look positive".

Indeed, typically for Enron, Azurix was financed creatively. At least three off- balance-sheet vehicles - the Marlin, Atlantic and Bristol water trusts - were used to own part of Azurix, hold the debt created to buy Wessex Water and service that debt.

Marlin raised $1.15bn from international investors in an offering of notes, but comforted investors with debt triggers that allowed them to claim immediate repayment if Enron's share price fell below $37.84 - or if the notes were downgraded to "junk" status.

In this way, Enron bet once again on a rising or stable share price - as it did in creating other off-balance-sheet vehicles designed to massage its figures.

"I thought the problem was to do with Rebecca, that she didn't have the experience to run the company," Ms Spottiswoode says. "I thought at the time that Azurix was an exception within a well-run company. But now it seems there was a mini-Enron within Azurix." Additional reporting by Khozem Merchant in Bombay, Robert Wright in Budapest, Thomas Catan in Buenos Aires and Gwen Robinson