In a world of pain and sorrow, a smiling little man in a saffron robe who can cure misery by magic is a bewitching prospect.

To millions of followers around the world, Sai Baba is a benevolent spiritual leader whose hospitals and schools work tirelessly for the advancement of the poor. But an investigation by The Times today discloses that three British men have apparently taken their own lives after becoming followers of the miracle worker. Two of them were encouraged to believe that he could cure their medical problems. One of those also said that he had been touched intimately by the Sai Baba.

This is the same Sai Baba who is adored and indulged by the international jet set. The Duchess of York had the treat of watching him produce a gold watch and cross from thin air when she visited his ashram in India.

The Prince of Wales's architectural adviser, Keith Critchlow, designed a vast, stunning hospital for Sai Baba, which has been compared to St Peter's in Rome and a maharaja's palace. "The most influential holy man in India today," is how the respected architect describes the guru.

The hospital, mostly financed by Isaac Tigrett, the wealthy American founder of the Hard Rock Café chain of restaurants, treats the humble people of the southern Indian state of Andhra Pradesh. So it was with righteous indignation that Sai Baba, in a rare fit of public anger, has turned on the band of disillusioned disciples who are now tarnishing his name.

Jesus Christ, said Sai Baba to a large crowd of devotees, underwent many hardships and was put on the cross because of jealousy. In those days there was only one Judas to betray him, but now there are thousands.

The holy man alleged that his detractors were being bribed to lie about him because of fear of his growing popularity. "People are trying to stop me but can do nothing," he said. "People love and follow Sai because of the truth I stand for and the love that is my basis."

Detractors are casting doubt on Sai Baba's miracles, suggesting that he is little more than a conjuror with a limited repertoire of jaded tricks. A financial row over the £13 million fortune of the British film actor James Mason, whose widow became a Sai Baba devotee, is smouldering. Most devastating is the suggestion that Sai Baba might have been abusing his power over young male followers by indulging in sexual activity with them.

Sai Baba was born Sathyanarayana Raju on November 23, 1926 in the tiny village of Puttaparthi in Andhra Pradesh.When he was only 14, Sai Baba - already magically producing candles and pencils for school friends - surprised his family by announcing that he was the reincarnation of Sai Baba of Shirdi, a miraculous old Indian sage who died in 1918.

Today Sai Baba's birthplace is home to an ashram that can accommodate 10,000 pilgrims. The obscure village has grown to cater for Sai Baba's followers, of which there are more than 20 million worldwide. They include some of India's most influential people. The legendary batsman Sachin Tendulkar, who helps to organise cricket matches at Sai Baba's stadium, says that he "worships" the guru.

The director-general of police in Andhra Pradesh, H. J. Dora, acts as Sai Baba's chauffeur when the spiritual leader visits the state capital, Hyderabad. Judges and top civil servants flock for audiences with him. The Indian Prime Minister A. B. Vajpayee, another follower, has opened a new Sai Baba hospital in Bangalore. In a lofty tribute, the premier said that Sai Baba has shown humanity the path of liberation which goes beyond freedom from worldly attachments.

However, the first cracks in faith in Sai Baba's magical powers came about because of a visit by a previous prime minister, Narasimha Rao, also a devotee.For this special occasion, Sai Baba appeared to materialise a gold watch from nowhere. But when Indian state television workers played back film of the incident in slow motion, they saw that the miracle was a sleight-of-hand hoax. The clip was never broadcast in India but has been widely circulated on videotape there. Sai Baba's most common miracle is to produce "sacred ash" from between his fingers.

Sometimes he pulls shiny, solid religious artefacts from his mouth. But magicians who have analysed these wonders say they are nothing more than old and simple tricks. Sai Baba is being challenged on another more prosaic front. Questions are being asked about the fundraising techniques employed by his followers. Some are accused of targeting vulnerable rich people and claiming that the miracle worker might be able to cure the afflictions of old age.

One of Sai Baba's most devout followers was Clarissa Mason, the second wife of the film star James Mason. When Clarissa died of cancer in 1994, she willed a large part of her late husband's £13 million estate to the cult, although, due to a dispute with Mason's children, Portland and Morgan, who contend that the estate was not hers to will in the first place, it will be some time before the cult can hope to see any of the Mason millions.

Clarissa Mason believed utterly in the powers of Sai Baba, filling her house near Lake Geneva with pictures of the "godman". Her legacy has gone to a trust whose beneficiaries are believed by Mason's children to include a follower of Sai Baba.

But more potentially damaging than claims about money are the sexual allegations against Sai Baba. These were first publicised as long ago as 1976, when Tal Brooke, a disenchanted American devotee, wrote Avatar of Night. Over the years, the description by disillusioned followers of intimate acts involving Sai Baba has persisted.

The suggestion is that Sai Baba grants one-to-one audiences to young men, who believe they are in the presence of a living god. This may entail a high level of intimacy and the men allowing their private parts to be touched or fondled by the guru.

There have been no prosecutions. A complaint was lodged with India's Central Bureau of Investigation on March 12, 2001 but there has been no result. In the United States, though, anti-Sai Baba campaigners are trying to persuade the authorities to open investigations into the alleged molestation of American citizens who are minors. The co-ordinator of this American campaign says that he has been interviewed by the Federal Bureau of Investigation but no formal inquiry is under way.

So has Sai Baba, the most worshipped sage of the Orient, really been groping youthful followers. One innocent explanation is provided by Stuart Jones, a member of Sai Baba's Bristol and Bath group. He points out that there is a possible cultural misunderstanding at play. In yoga, Jones explains, one of the energy points on the body is below the testicles, an area sometimes stimulated by a teacher such as Sai Baba.

"When I was out there, it happened to a couple of friends of mine, but it was more like, how can I say, doctor's surgery. There was no sexuality involved. One chap said that a tremendous amount of energy was suddenly released in him and he felt wonderful afterwards. I don't mean ejaculation. It was like suddenly feeling wonderful. Sometimes he rubs the chest or the forehead where these other points are."

Talk of "energy points" does not endear Sai Baba to the Indian Rationalists Association, an organisation of atheists and doubters which seeks to debunk organised religion and disprove all miracles. They denounce him as the biggest fraud of the "god industry". Joseph Edamaruku, the association's president, says: "He has consistently refused to subject himself to an independent examination. He raises enormous amounts of money from India and around the world. We do not believe claims that it is spent on hospitals and charitable works."

One charitable field where Sai Baba's followers do seem to be most active is education. Sai Baba's teachings, however, are a collection of banal truisms and platitudes. The most famous utterances he has made in a six decade-long career as a living god are "Help ever, hurt never" and "Love all, serve all". Few are likely to argue with such a simplistic and universal moral code. He broadens his appeal further by allowing devotees to continue practising their own religion while paying homage to him.

Sai Baba's children's course, Education in Human Values, is taught in schools in 100 countries. It promotes five qualities: truth (satya), righteousness (dharma), peace (shanti), love (prema) and nonviolence (ahimsa). Education in Human Values rejects rote learning, emphasising Indian techniques such as "silent sitting", quotation, story-telling, song and group activities.

Sai Baba's message reaches British schoolchildren through two charities. The first is named in his honour, the Sathya Sai Education in Human Values Trust UK, which claims to have had contact with 80 schools. Typical of its activities is a summer camp held at Christchurch Primary School in Ilford, East London, several weeks ago where 100 children painted, played games and sang. Courses have been cleverly designed to fit into Key Stages 1 to 4 of the National Curriculum, targeting children aged seven to 16.

The charity states that it does not promote any particular religion. Carole Alderman, the founder, a former ChildLine volunteer, has no teaching qualifications. She admits to using some of Sai Baba's quotations but says: "We don't teach about Sai Baba at all."

She adds: "I have witnessed a lot of his miracles. I have seen people going in with crutches or wheelchairs and come out walking. I have seen him materialise things many times a day. He just knows everything." Asked about the sexual allegations, she says: "It's totally unfounded. Anybody who actually knows him, knows it is."

Another British charity, the Human Values Foundation, says it has reached more than 500 schools. Its chairman, Dennis Eagan, said "The foundation has nothing to do with Sai Baba."

But the Human Values Foundation's programme is also called "Education for Human Values". It promotes Sai Baba's same five virtues, using "silent sitting", activities, songs, quotations and stories. Its president, June Auton, has been a regular visitor to Sai Baba's ashram. She has been described by Barry Pittard, a former English lecturer at Sai Baba's college in India, as "synonymous with Swami's Human Values Programme."

Auton told The Times: "I'm not going to discuss anything about my religion at all on the phone. My religion is my business." Pressed, she would only say: "I do attend my local church." It is the recent suicides, however, that may hurt Sai Baba the most in Britain. Suicides and suspicious deaths have long marred his reputation. A German man was found hanging from a rafter in Puttaparthi in the early 1980s. A father and daughter took fatal overdoses in Bangalore in 1999 after failing to get an audience with the guru.

In a puzzling incident in June 1993, Sai Baba was attacked by four young male devotees armed with knives. Two of the guru's bodyguards were stabbed to death. After the four youths, long-time followers of Sai Baba, locked themselves in a room, they were all shot dead by police. Challenging faith in a man of miracles can be painful. At Sai Baba's Central London base in Clerkenwell, there is reluctance to confront the allegations of sexual harassment, suicides and financial maneuvering.

Dee Puri, at the London headquarters, denounces the suggestion that Sai Baba takes money from the rich, pointing out that at his 28-year-old London premises: "Entrance is free. There is no money going to Baba at all.

As for the suggestions of sexual harassment, she told The Times: "I don't want to talk about it because there is no such thing. I think such conversations disturb me and my beliefs. The organisation is most unhappy that you have tried to hurt us. Nobody will speak to you unless you want to write something which is truth, which is not controversial.

"As far as I am concerned, Baba is a great, great guru. Thirty years I have been a devotee of Baba and millions and millions of people are, so I would very respectfully ask you please not to put that sort of question to me."