John McBeth, Jakarta – For both admirers and critics of Indonesian President Abdurrahman Wahid, the picture is disturbing: At the presidential palace in Jakarta there are signs of a new "royal court" in the making. Officials converse in Javanese, not the national language Bahasa Indonesia; Wahid himself borrows from mysticism and ancient tracts to plot political strategy; and family and friends are acting as gatekeepers and facilitators, in some cases for businessmen hoping to curry favour.

Some analysts describe it as a form of "benign Suhartoism," a throwback to the disastrous last decade of President Suharto's 32-year rule. Benign or not, the legitimacy and relative stability Wahid has brought to a nation exhausted by two years of economic and social upheaval continues to be overshadowed by leadership shortcomings that create space for would-be cronies. Left unchecked, these could threaten his reputation as a man of principle and democratic ideals.

The concern stems from several factors. These include the roles being played by Wahid's children and a decision to separate the palace from other parts of the administration. At the centre of it all is Wahid's personal manner. His diffident, laissez-faire style may work to disarm rivals, but it shows signs of hurting his government's relationship with the International Monetary Fund and domestic allies. Wahid's willingness to meet with heavily indebted businessmen – in particular, textile tycoon Marimutu Sinivasan, who owes the government $1 billion – is fuelling notions that such people receive special protection. In private, some palace officials express serious concern.

Then there's the president's apparent inability to bluntly say "no." Critics say his vagueness and reluctance to confront others encourages businessmen to seek favour and leads investigators to be careful about the businessmen they pursue.

While the president's near-blindness makes him dependent on his inner circle for information and advice, there is an additional dimension: a resurgence in the business activities of the Nahdlatul Ulama – the Muslim mass organization that still serves as Wahid's power base – and the resurrection of two business groups that supported Wahid during his 16 years at the NU's helm. By any measure, the task he has in forging a new future for Indonesia and escaping old political ways is formidable. Saddled with a cabinet thrust upon him by the necessities of accommodating widely diverging political interests, he has had a difficult baptism. During the first four months of his presidency, his attention has been consumed by the twin tasks of removing former armed-forces chief Gen. Wiranto from his positions of influence and the need to warn off the retired generals and Muslim radicals Wahid holds responsible for outbreaks of unrest across the country.

In part, this explains the president's lack of progress in fixing the economy and initiating urgent reforms, particularly in the justice system. But further delay could heighten perceptions that the transition is proving unduly long and difficult and, perhaps more worryingly, allow a resurgence of some of the old habits that people thought had died with the Suharto era.

Political scientist Cornelius Luhulima, a long-time acquaintance of Wahid, says a lack of democratic institutions – and a parliament he appears to have little faith in – makes it difficult for the president to lead in a conventional sense. But critics point out that by falling back on this traditional Javanese pattern of leadership, which emphasizes the wisdom of the leader, Wahid ensures that everything comes back to him – just as it did with Suharto. He runs the government in much the same erratic, personalized manner he has used at the Nahdlatul Ulama.

Although Wahid has recovered from last year's serious stroke, some of his wilder statements suggest he often has a loose grip on reality. "He likes people giving him information," says Greg Fealy, an Australian scholar and an expert on the 30 million-strong NU. "But he can have six people giving him sound information and a seventh person telling him something that tickles his fancy – and that's the one he believes. It's the mystic in him. He wants something that stimulates him." Little wonder that an Indonesian newspaper recently noted in an editorial that Wahid "has been very skilful in solving problems created by himself."

In the first weeks of his presidency, Wahid's aides were drawn into the fight to end what one describes as a "psychological war" against the military's suffocating hold over the palace. Mostly, it was about separating the palace staff from other departments in the State Secretariat, the body that handles the executive's administrative chores. In fact, what has emerged is a throwback to the days of founding President Sukarno, whose fiercely loyal staff proved impervious to outside interference. This separation of the palace from other parts of the administration has become a key worry for those who see in its independence the makings of a new royal court.

Then there are those who surround Wahid, and on whom the near-blind cleric relies. Many of the early skirmishes of his administration were fought by tough-minded Ratih Hardjono, 39. A relative and former journalist, she served as Wahid's personal assistant during general elections last year and in the lead-up to his unexpected presidential coup. More recently, newly promoted State Secretary Bondon Goenawan and Cabinet Secretary Marsilam Simanjuntuk have joined her. The two are former members of Democracy Forum, an activist group Wahid headed in the early 1990s.

Although they have no official positions, Alisa, 27, and Zannuba (or Yenny), 24, two of the president's daughters, serve as his eyes and ears. They read to him, interpret the body language of the people he talks to – not always accurately, according to one annoyed ambassador – and act as his gatekeepers. Questions about Wahid's reliance on them and Yenny's role, in particular, surfaced after three of the president's aides were called to a parliamentary hearing to explain, among other things, the source of information he has been receiving.

The president also depends a lot on his brothers. Hasyim Wahid offers advice and acts as a channel for businessmen and other visitors. He also interprets Wahid's dreams, according to insiders. Another brother, Salehudin, is what an acquaintance calls the "family conscience" while a third, Umar, a well-liked pulmonary specialist, serves as the coordinator of the president's medical team. "To keep Gus Dur healthy," Umar has told friends, using Wahid's nickname, "is to keep him busy." Not everyone thinks having the family around the president is so bad. Says Maritime Affairs Minister Sarwono Kusumaatmadja: "If you're blind, what else can you do. I'd rely on my kids and no-one else – even if they don't have formal positions."

Much of the criticism stems from the fact that unlike the authoritarian Suharto, Wahid wants to encourage his ministers to think and act for themselves. But by not providing his cabinet with either guidance or direction, he has instead created the impression of policy drift and political stagnation. Working in the Wahid government, intones Sarwono, "is like walking on a bed of treacle – laborious, with hardly any real progress."

Describing a picture of inexperienced ministers unwilling to play at high stakes and groping through a maze of bureaucracy, Sarwono bemoans the shortage of what he calls "movers and shakers" and "predator types." More importantly, he says, the president needs to strengthen macro-management – "he's got to have someone who can run the government on a day-to-day basis and go after implementation, something like a prime minister."

So what of the future? Political analyst Marcus Mietzner sees little prospect of the situation changing: "Abdurrahman Wahid will be around for some time – providing biology and tuhan [God] don't intervene." But, he adds, that assumes continuing weakness in the country's political parties and the absence, for now, of a credible alternative.