Vicious infighting threatens to tear apart the congregation of one of Melbourne's largest mosques, amid claims that millions of dollars of donations have disappeared and accusations that a sheikh had behaved inappropriately with women.

The conflict came to a head last week when Sheikh Mohamad Abou Eid – who had been banned from Preston Mosque – told hundreds of worshippers on the street outside that he feared management of the mosque had misappropriated donations, and fees paid for burial and school services.

Sheikh Mohamad Abou Eid wears dark glasses as he walks to Preston Mosque before Friday prayers. Credit:Jason South

The Islamic Society of Victoria, which manages the mosque, reported allegations of inappropriate behaviour by the sheikh to the Board of Imams.

He was suspended, and, despite later being told the claims could not be proven, resigned from his position on Friday.