Poverty reduction in developing countries requires reducing inequality and protecting vulnerable groups as well as promoting economic growth, according to an influential report published on Tuesday by the World Bank.

In its eagerly awaited annual World Development Report, the bank said the war on poverty needed a broader approach than previously thought. The WDR has been the subject of intense interest from development charities and governments since its first author, the academic economist Ravi Kanbur, resigned in June following changes made to the report to place a stronger emphasis on growth.

"There is a powerful case for bringing vulnerability to centre stage," the report said. "Inequality is back on the agenda. New work shows the importance of gender, ethnic and racial inequality as a dimension - and a cause - of poverty."

The report said that while economic growth was crucial for poverty alleviation, it needed to be buttressed by strong social institutions and government intervention to help those people in developing countries who might be adversely affected by economic liberalisation and freer trade.

Nora Lustig, the report's director, said on Tuesday: "Growth may not be enough. To increase the share of poor people in the benefits of growth, we must also address inequality."

Ms Lustig said that growth and redistribution were mutually reinforcing. "Growth is good for the poor, but reducing poverty can be good for growth," she said.

The report was welcomed by many development charities, which said it marked a return to the more wide-ranging conclusions of Mr Kanbur's earliest draft rather than the narrower focus on growth promoted by some economists within the World Bank.

But they said that the report bore the marks of the internal tussle over its content."This is a flagship document the World Bank can be proud of," said David Bryer, director of Oxfam, the British development campaigning organisation. "The World Bank has placed extreme inequality at the heart of the poverty problem." But he added: "After setting out a compelling case for redistribution in one chapter of the report, parts of the next chapter provide a bland recitation of free market platitudes."

Duncan Green, policy adviser with the aid agency Cafod, said the report was a "Janus document", whose arguments ran in several different directions.

Economists who place a stronger emphasis on economic growth said the report was woolly and lacked specific analysis of how supplementary policies could help the poor. "The report understates the role of growth," said Jagdish Bhagwati, a leading academic development economist. "Whatever other problems exist, like illiteracy, economic growth is a powerful tool against them."

The report, which provides the underlying philosophy for the bank's work in developing countries, took on particular significance after Mr Kanbur's resignation. Although he has not spoken publicly about his departure, Mr Kanbur is understood to have objected to changes between the initial consultation draft and the interim version of the report.

He objected to the playing down of "empowerment" - widely interpreted to mean income and wealth distribution - in favour of "opportunity", of which the key element is economic growth.

Mr Kanbur's views conflicted with those of some economists within the bank's own research department. Nick Stern, the World Bank's chief economist, said yesterday that Mr Kanbur's resignation had been unnecessary.

"Ravi saw the changes that had been made, and forecast that he would be under pressure to make further basic changes," he said. "That turned out to be wrong." Professor Stern said he was gratified that development campaigners were pleased with the final version of the report.