Transparency International warned Kenya risked turning into a failed state.
A rift in the fragile power-sharing government developed after PM Raila Odinga announced the suspension of two ministers after corruption scandals.
President Mwai Kibaki annulled the suspensions, saying the Mr Odinga did not have the power to take the action.
The head of Transparency International in Kenya, Job Ogonda, said the political dispute in Kenya's coalition government was sending out a very dangerous message.
It was showing that the struggle for power was more important than the fight against corruption and this, he said, would have dire consequences come the next election.
"In 2012 it's very likely we're going to have a meltdown," said Mr Ogonda.
"We have the significant risk that Kenya will be generating to a failed state.
"This is how in Sierra Leone and indeed Liberia were fomented: the executive being eliminated and oblivious for the failed state risks that corruption causes especially where the population is young, educated and unemployed".
Plagued by scandal
Fighting corruption in Kenya is a difficult - some would say impossible - task.
Mr Ogonda said his staff had been threatened on several occasions.
While he said some Kenyan politicians had built a reputation through professionalism and accountability, he was on the whole scathing of the political elite.
"Within parliament you find a new breed of leaders who are committed to the good governance of this country, but the vast majority of the people who wield immense power are definitely fraudsters," he said.
Kenya has in the past been plagued by huge corruption scandals, but punishing the perpetrators is very rare.
Whilst the political dispute in Kenya has halted the suspension of two ministers, Job Ogonda said if they were to be suspended it would send out a positive message and would help end a deeply entrenched culture of impunity.
