This week a classified video of a US air crew killing unarmed Iraqis was seen by millions on the internet. But for some, the whistleblowing website itself needs closer scrutiny

It has proclaimed itself the "intelligence service of the people", and plans to have more agents than the CIA. They will be you and me.

WikiLeaks is a long way from that goal, but this week it staked its claim to be the dead drop of choice for whistleblowers after releasing video the Pentagon claimed to have lost of US helicopter crews excitedly killing Iraqis on a Baghdad street in 2007. The dead included two Reuters news agency staff. The release of the shocking footage prompted an unusual degree of hand-wringing in a country weary of the Iraq war, and garnered WikiLeaks more than $150,000 in donations to keep its cash-starved operation on the road.

It also drew fresh attention to a largely anonymous group that has outpaced the competition in just a few short years by releasing to the world more than a million confidential documents from highly classified military secrets to Sarah Palin's hacked emails. WikiLeaks has posted the controversial correspondence between researchers at East Anglia University's Climatic Research Unit and text messages of those killed in the 9/11 attacks.

WikiLeaks has promised to change the world by abolishing official secrecy. In Britain it is helping to erode the use of the courts to suppress information. Its softly spoken Australian director, Julian Assange, was recently in Iceland, offering advice to legislators on new laws to protect whistleblowers.

Assange, who describes what he does as a mix of hi-tech investigative journalism and advocacy, foresees a day when any confidential document, from secret orders that allow our own governments to spy on us down to the bossy letters from your children's school, will be posted on WikiLeaks for the whole world to see. And that, Assange believes, will change everything.

But there are those who fear that WikiLeaks is more like an intelligence service than it would care to admit – a shadowy, unaccountable organisation that tramples on individual privacy and other rights. And like so many others who have claimed to be acting in the name of the people, there are those who fear it risks oppressing them.

Assange has a shock of white hair and an air of conspiracy about him. He doesn't discuss his age or background, although it is known that he was raised in Melbourne and convicted as a teenager of hacking in to official and corporate websites. He appears to be perpetually on the move but when he stops for any length of time it is in Kenya. Almost nothing is said about anyone else involved with the project.

WikiLeaks was born in late 2006. Its founders, who WikiLeaks says comprised mostly Chinese dissidents, hackers, computer programmers and journalists, laid out their ambitions in emails inviting an array of figures with experience dealing with secret documents to join WikiLeak's board of advisers. Among those approached was the inspiration for the project, Daniel Ellsberg, the US military analyst who leaked the Pentagon papers about the Vietnam war to the New York Times four decades ago.

"We believe that injustice is answered by good governance and for there to be good governance there must be open governance," the email said. "New technology and cryptographic ideas permit us to not only encourage document leaking, but to facilitate it directly on a mass scale. We intend to place a new star in the political firmament of man." The email appealed to Ellsberg to be part of the "political-legal defences" the organisers recognised they would need once they started to get under the skin of governments, militaries and corporations: "We'd like … you to form part of our political armour. The more armour we have, particularly in the form of men and women sanctified by age, history and class, the more we can act like brazen young men and get away with it."

Others were approached with a similar message. WikiLeaks organisers suggested that it "may become the most powerful intelligence agency on earth". Its primary targets would be "highly oppressive regimes in China, Russia and central Eurasia, but we also expect to be of assistance to those in the west who wish to reveal illegal or immoral behaviour in their own governments and corporations."

But the group ran in to problems even before WikiLeaks was launched. The organisers approached John Young, who ran another website that posted leaked documents, Cryptome, and asked him to register the WikiLeaks website in his name. Young obliged and was initially an enthusiastic supporter but when the organisers announced their intention to try and raise $5m he questioned their motives, saying that kind of money could only come from the CIA or George Soros. Then he walked away.

"WikiLeaks is a fraud," he wrote in an email when he quit. "Fuck your cute hustle and disinformation campaign against legitimate dissent. Same old shit, working for the enemy." Young then leaked all of his email correspondence with WikiLeak's founders, including the messages to Ellsberg.

Despite this sticky start, WikiLeaks soon began making a name for itself with a swathe of documents and establishments started kicking back.

Two years ago, a Swiss bank persuaded a US judge to temporarily shut down the WikiLeaks site after it published documents implicating the Julius Baer bank in money laundering and tax evasion. That revealed WikiLeaks' vulnerability to legal action and it sought to put itself beyond the reach of any government and court by moving its primary server to Sweden which has strong laws to protect whistleblowers. Since then the Australian government has tried to go after WikiLeaks after it posted a secret list of websites the authorities planned to ban, and members of the US Congress demanded to know what legal action could be taken after the site revealed US airport security manuals. Both discovered there was nothing they could do. It's been the same for everyone from the Chinese government to the Scientologists.

Yet WikiLeaks worries more than just those with an instinctive desire for secrecy. Steven Aftergood, who has published thousands of leaked documents on the Secrecy News blog he runs for the Federation of American Scientists, turned down an invitation to join WikiLeaks board of advisers.

"They have acquired and published documents of extraordinary significance. I would say also that WikiLeaks is a response to a genuine problem, namely the over control of information of public policy significance," he says. Yet he also regards WikiLeaks as a threat to individual liberties. "Their response to indiscriminate secrecy has been to adopt a policy of indiscriminate disclosure. They tend to disregard considerations of personal privacy, intellectual property as well as security," he says.

"One of the things I find offensive about their operations is their willingness to disclose confidential records of religious and social organisations. If you are a Mormon or a Mason or a college girl who is a member of a sorority with a secret initiation ritual then WikiLeaks is not your friend. They will violate your privacy and your freedom of association without a second thought. That has nothing to do with whistleblowing or accountability. It's simply disclosure for disclosure's sake." Aftergood's criticism has angered WikiLeaks. The site's legal advisor, Jay Lim, wrote to Aftergood two years ago warning him to stop. "Who's side are you on here Stephen? It is time this constant harping stopped," Lim said. "We are very disappointed in your lack of support and suggest you cool it. If you don't, we will, with great reluctance, be forced to respond."

WikiLeaks has also infuriated the author, Michela Wrong, who was horrified to discover her book exposing the depths of official corruption in Kenya, It's Our Turn To Eat, was pirated and posted on WikiLeaks in its entirety on the grounds that Nairobi booksellers were reluctant to sell it for fear of being sued under Kenya's draconian libel laws.

Wrong was angry because, while she supports what WikiLeaks is about, the book is not a government document and is freely available across the rest of the world. From email distribution lists she could see that the pirated version was being emailed among Kenyans at home and abroad. "I was beside myself because I thought my entire African market is vanishing," says Wrong. "I wrote to WikiLeaks and said, please, you're going to damage your own cause because if people like me can't make any money from royalties then publishers are not going to commission people writing about corruption in Africa." She is not sure who she was communicating with because the WikiLeaks emails carried no identification but she assumes it was Assange because of the depth of knowledge about Kenya in the replies.

"He was enormously pompous, saying that in the interests of raising public awareness of the issues involved I had a duty to allow it to be pirated. He said: 'This book may have been your baby, but it is now Kenya's son.' That really stuck in my mind because it was so arrogant," she says. "On the whole I approve of WikiLeaks but these guys are infuriatingly self-righteous." WikiLeaks does apparently expect others to respect its claims to ownership. It has placed a copyright symbol at the beginning of its film about the Iraq shootings.

Assange has countered criticism over some of the material on the site by saying that WikiLeak's central philosophy is "no censorship". He argues that the organisation has to be opaque to protect it from legal attack or something more sinister. But that has also meant that awkward questions – such as a revelation in Mother Jones that some of those it claims to have recruited, including a former representative of the Dalai Lama, and Noam Chomsky, deny any relationship with WikiLeaks – are sidestepped.

Despite repeated requests for a response to the issues raised by Aftergood, Wrong and others, WikiLeaks' only response was an email suggesting to call a number that went to a recording saying it was not in service.

• This article was amended on 13 April 2010. The original referred to Julius Bare bank. This has been corrected.

