Emerging economies said on Sunday that they will challenge a tradition that has placed an American at the head of the World Bank for decades, as the Obama administration shows sensitivity to the need for change at global institutions.

Emerging economies said it was time to break a decades-old tradition that has long shut out candidates from the developing world and kept an American at the head of the World Bank and a European leader at the International Monetary Fund.

The problem emerging economies face is finding a candidate willing to challenge the United States, which is the largest and most influential shareholder in the World Bank and IMF.

I am sure the United States will nominate an excellent candidate but it is imperative that the process this time be contestable, said Amar Bhattacharya, director of the G24 Secretariat, whose members include major developing and emerging economies.

There are very strong candidates in the developing world. It is important, therefore, that emerging and developing countries make every effort to identify suitable candidates from the developing world, he added.

Bhattacharya said emerging and developing countries would try to come up with a list of candidates by the deadline for nominees on March 23.

The politically-thorny issue of whether the leadership of the World Bank should be reserved for an American was not formally raised during G20 meetings of finance ministers in Mexico City at the weekend.

But U.S. Treasury Secretary Timothy Geithner privately sounded out ministers from emerging economies on the sidelines on qualities necessary to head the World Bank, but did not say who the U.S. candidate might be, senior G20 official told Reuters.

Addressing a closing news conference on Sunday, Geithner made no direct comment about the World Bank but appeared to send a message that Washington recognized the need for change to reflect the growing economic might of emerging economies.

The U.S. has played a major role, and has been very supportive, of reforms in the IMF and other international financial institutions to significantly increase the voice and vote of the major emerging economies in those institutions, Geithner said.

That is very much in the interest of the United States, and certainly in the interest of the broader legitimacy and effectiveness of those institutions. We are very committed to making sure those reforms take effect and we can build on those reforms in the future, he added.

The question of who should heads the World Bank did not feature prominently at the G20 as expected as ministers focused on Europe's efforts to manage its debt crisis and ensuring that the IMF is properly funded to deal with potential global fallout from Europe's troubles.

Three people most often mentioned as possible U.S. nominees are all American: former U.S. Treasury Secretary Lawrence Summers, U.S. Secretary of State Hillary Clinton, and U.S. Ambassador to the UN Susan Rice. The State Department has said Clinton would not be taking the job.

They can put forward their candidate but rather than it becoming a destructive exercise, it should be a constructive process to that we attempt to build consensus on who the candidate should be, South African Finance Minister Pravin Gordhan said.

It is idealistic but let's give it a shot.

Groupings such as the BRICS - Brazil, Russia, India, China and South Africa - have struggled to come up with candidates given the long-standing dominance of Europe and the U.S. in the institutions.

Mexico's central bank chief Agustin Carstens, who last year launched an unsuccessful bid against France's Christine Lagarde for the IMF top job, has ruled himself out of the World Bank race. So has Nigeria's Finance Minister and former World Bank Managing Director Ngozi Okonjo-Iweala.

Over the last few years the World Bank has taken steps to enhance emerging markets' power and influence, endorsing a plan in 2010 that gave more voting power to developing countries, making China the third-largest shareholder behind the United States and Japan.

Its chief economist is from China and two of the three managing directors are from emerging markets Egypt and Indonesia.

The World bank is the leading provider of development grants and loans to poorer countries and its president is one of the world's top policymakers.

(Reporting By Lesley Wroughton)