The American Red Cross, its image tarnished by public and government criticism and its operations hindered by a moss-backed and overweight bureaucracy, is embroiled in a far-reaching and self-critical reassessment of its part in its proud 110-year history.

Elizabeth Dole takes over the presidency of the venerable organization this week.If she and her board of governors agree, the Red Cross next month will undertake its most dramatic change since co-founder Clara Barton was booted out as its head 87 years ago.

Bold recommendations by a special committee include an overhaul that would:

- Give local Red Cross chapters more power and more money.

- Begin a de-emphasis of the Red Cross' historic relationship with the U.S. armed forces.

- Eliminate much of the top-heavy Washington, D.C., Red Cross bureaucracy.

- Start a new commitment to racial and ethnic diversity not only among the clients it helps but the organization's more than 1 million staff members and volunteers.

"This is a very healthy, very positive move," San Francisco Red Cross executive Roger Dickson said of the 65-page, still-confidential reorganization document being circulated among Red Cross officials nationwide.

The document was started in April 1988 but was given major impetus by the twin disasters of the Northern California earthquake and Hurricane Hugo in the autumn of 1989.

In the aftermath of the quake and hurricane, the Red Cross came under severe criticism for its handling of disaster relief efforts.

"Without the unprecedented criticism of our efforts, there wouldn't have been the depth of self-criticism and analysis that has occurred," said a Red Cross official in Washington. "This study was already under way, but there have been other studies in the past that were done, then put on a shelf. This one won't be."

The sweeping recommendations will go before the Red Cross board of governors at its February meeting in Washington, D.C.

Dole, 54, a former Labor secretary, wasn't available to discuss the report last week. But she takes over an American institution in troubled transition, unmatched since Barton, at 83, was forced to resign because of her leadership style.

"The oversight committee found mistrust and lack of accountability to be central problems in the Red Cross," the committee said. Its criticism included the board of governors for not holding the $1 billion-a-year institution's top management fully accountable.

The organization must shift its attention and resources "from internal concerns to meeting the needs of customers and clients," the committee said.

The report suggested as a solution decentralization, including junking many of the agency's 117 national advisory committees, which have led to confusion and contradictions.

The committee also called for replacing the current top-heavy, Washington-dominated structure with a regional operation "that is closer to the (local) chapters, more supportive of their needs, and which diverts less financial resources from direct service delivery."