IT wasn't supposed to be like this. Five years ago, on the back of solid growth in the 2002 general election and the local/Euro elections of '04, many commentators were predicting that Sinn Féin was on course to win 15 Dáil seats. And that was before anybody envisaged the depth of the economic recession coming down the tracks – bringing with it a collapse in support for Fianna Fáil. If that had been known then, forecasts of the party's growth in the south would have been considerably higher still. Seats in government in both parts of Ireland would have been regarded as inevitable.

But the commentators got it badly wrong. Far from gaining seats in the 2007 general election, Sinn Féin lost one, limping back to the Dáil with just four TDs – less than a third of what the party itself had aimed for. And, despite the economic crisis, which should have been tailor-made for a party of the left, the party's fortunes have continued to wane. Last June's elections saw local council seat losses in Dublin. Sinn Féin's standard bearer in the Republic, Mary Lou McDonald, failed to retain her European Parliament seat.

Defections from the party have continued at a steady rate, with highly rated Dublin City councillor Killian Forde recently decamping to the Labour Party – a move that would have been completely alien to Sinn Féin and its military-like discipline just a few years back. Morale in Dublin, and in former target constituencies such as Wexford, is at rock bottom.

The party's support in the North is as solid as ever – the prospect of Sinn Féin emerging as the biggest party there looks a distinct possibility. But in the south, and particularly in Dublin, Sinn Féin is a party in crisis – riven by recriminations, lacking in funds and shorn of once key personnel.

The fact that the peace process – albeit with a couple of outstanding issues to be resolved – has largely disappeared as an issue hasn't helped in terms of a reduced profile in the south, but many in the party believe the problems are largely self-inflicted. Few are willing to say it publicly but, in private, the finger of blame is being firmly pointed at Sinn Féin's northern leadership, who it is claimed do not understand the nuances of politics in south but still insist on imposing their will on the local organisations. This has resulted, internal critics say, in bad strategies, the appointment of people to positions in the party who have no experience in the role, and wrong candidate selection.

The most obvious example of the latter, party members say, was the decision to run Mary Lou McDonald in Dublin Central in the 2007 general election. The view in the Dublin organisation of Sinn Féin was that McDonald would not and could not win a seat in Dublin Central and that Dublin Mid-West represented a much more viable target. But they were overruled by a leadership who, it is claimed, wanted to be seen to take on Fianna Fáil leader Bertie Ahern in his own backyard.

The move backfired with McDonald, a talented politician who was being groomed as a future leader, falling well short of winning a seat in Dublin and left with little hope of doing so in the future, particularly after the departure of Dublin Central party stalwart Christy Burke from Sinn Féin.

Loss of talented people

A further decision, reportedly taken at the insistence of the Belfast leadership, to then run the relatively unknown Joanne Spain in Mid-West, rather than a candidate identified by local party activists, directly resulted in many of the party's officer board in the capital leaving the party. "The cohort of really good, talented people, who were involved in Mary Lou's successful Euro election campaign of 2004, all left," recalled one insider, adding that the once formidable party organisation in Dublin is now decimated.

But this micro-managing was not confined to Dublin. Party sources say that Wexford, where there was a serious organisation and John Dwyer was building a really high profile and poised to win a Dáil seat within a couple of general elections, is another example. "There were constant diktats from head office and it caused massive tensions. Now the party has no councillors there and John has left," one senior source says.

The party's watering down of its left-wing policies in the run-up to the 2007 general election is also identified by people in the party as being a key mistake. They say the leadership felt that coalition with Fianna Fáil was a real possibility and looked to make itself more suitable for government by diluting key policies such as on corporation tax. "You can't waver on critical policies just a few weeks before a general election," said one senior party figure.

This perceived move away from the party's 'working-class heart', allied to the disenchantment over the degree of control from Belfast, was a factor in a lot of important activists leaving Sinn Féin. "The party lost the type of people no political party can afford to lose, men and women in their early 30s, who had the experience and the maturity, but still had the energy," said one republican source. A number of figures have decamped to Eirigí, the new left-wing republican group.

Gerry Adams' disastrous performance in a television debate just days before polling day, when he appeared seriously out of touch with politics in the south, also comes up in any conversation with party activists. They question the level of preparation carried out for the debate and why Adams was there at all, with some arguing it is yet another example of the northern leadership's authoritarian nature and failure to delegate.

There remains enormous respect for Adams for all he has achieved, even among the party's most trenchant internal critics, and there would be no question of any heave against him, but privately there is a view among some that his undoubted skills are not what was and is required in southern politics. "He doesn't understand the south. He has fought a different war and he is suited to the long game – Machiavellian plotting and planning, which is a great strength in the peace process. But that isn't what's needed when you are growing an activist-based, dynamic party. He and many of those around him have been there a long time and are exhausted. Gerry should have gone after [the] 2007 [general election] and in any regular party he would have," is the verdict of one party figure.

Party in 'serious and critical decline'

But if anything, those on the inside say the party leadership has attempted to further tighten its grip on the organisation in the south since the disappointment of 2007. "There was no review that censured or criticised people for bad decisions made. In fact the people who made fundamental mistakes were promoted," was the assessment of one elected Sinn Féin representative. "Instead of a root-and-branch rethink, the prescription [after the general election] was more of the same: discipline, faith in the leadership" is the verdict of another senior republican.

This is the same point made by Killian Forde in a submission to the party last summer. Forde said the traditional republican values of loyalty and obedience, while understandable when at war, were the "greatest hindrance to us developing as a dynamic, interesting, vibrant, creative party". Criticism and accountability of the leadership had been discouraged "for so long that simply put there is a culture of fear and misguided loyalty that militates against empowerment and people taking responsibility with their work and the development of the party".

The city councillor was also critical of Sinn Féin's "glacial" response to the economic crisis and the party's structures, arguing that power lay with individuals and that anyone seeking to question or contribute had to "try and negotiate through a maze of offices, titles, committees, working groups and individuals to get their voice heard".

Forde argued that Sinn Féin was in "serious and potentially critical decline" in Dublin ? where the organisation had too few members and those who were there were tired and frustrated – and was "one election away from being totally irrelevant" in Dublin and the south in general. He advocated targeting and concentrating resources in five Dublin constituencies – abandoning the 'unwinnable' Dublin Central. This assessment taps into a view in some quarters of the party that, in the wake of 2004, the leadership lost the run of itself with projections of 14-plus seats and even saw itself going toe-to-toe with Fianna Fáil, in the process spreading resources far too thinly.

Adams' time drawing to a close

But, despite its obvious problems, it is doubtful that the party leadership will endorse such radical corrective action. Besides, with so much going on in the north at the moment, its attention probably won't be on the next general election in the south for some time. And by the time that election happens the party could be significantly changed. Adams' handling of the hugely serious allegations surrounding his brother Liam has caused considerable unease among party members and only added to the perception that his time as party leader is drawing to a close.

However, the failure to develop new TDs – most particularly McDonald and Pearse Doherty – mean that his successor will not be from the south as originally planned.

Sinn Féin, of course, is well used to being in difficult situations and rumours of its demise in the south may yet prove greatly exaggerated. A victory in the Donegal South-West by-election (see page 13), for example, could mark a change in the party's fortunes. But what is beyond question is that mistakes have been made and a golden opportunity, in the shape of the economic meltdown, has been missed.

"The momentum that we had in 2004 is gone. A lot of people have left, people who delivered that success in 2002 and '04," says one insider. "We missed the boat in the south and I'm not sure that can be overcome, certainly in the short term," says another. For now, at least, the goal of government on both sides of the border looks as far as it has done at any point in the last decade. The masterplan has come a little unstuck.