The British monarchy will be pitted against a compromise republican system in which MPs will elect a president, Australia's historic Constitutional Convention decided yesterday.

By a narrow margin, the Australian Republic Movement's (ARM) model made it through the final votes and bitter controversy to be the system the 152 delegates could agree on.

Prime Minister John Howard had said he would require a clear majority before testing the plan in a binding referendum, to be held next year. But in the end he accepted the crucial resolution of 73 for, 57 against and 22 abstaining by arguing that a majority had voted for a "generic" republic.

"It would be a travesty in common sense terms of Australian democracy for that proposition not to be put to the Australian people," he said.

Despite being a committed monarchist, Mr Howard emerged as the unlikely hero of the proceedings. They almost descended into chaos when the republicans were split between those favouring an Irish-style direct election of the president and the major ARM bloc insisting on parliament making the decision.

In the end the so-called "camel" model - because it is likened to a horse designed by committee - emerged, although it attracted support far below that of an absolute majority of delegates.

It proposes that, while the public can nominate candidates, the president would require the twothirds support of parliament to be appointed. The prime minister would have the sole power to dismiss him or her.

Announcing his decision to proceed with a referendum, Mr Howard said the $40 million (Australian) exercise had been a success for democracy and showed Australians had more things in common than apart.

"Despite our differences, we all smell the same eucalypt, we all know the same dust and we all feel the same salt in the same ocean," he said in an emotional closing address.

However, some monarchists were not in such a poetic mood. "If we pass it, we are voting for the death knell of the Westminster system and the constitution," said delegate Brigadier Alf Garland.

The chairman of the ARM, Mr Malcolm Turnbull, who was the architect of the new model, said he was confident Australians would embrace the plan in the referendum even though, historically, most were rejected by a conservative electorate.

"I think it's a very important day . . . We're one step closer to a republic but I think on this occasion we've taken a couple of steps in one leap."

However, the splits between the direct election renegade republicans and the ARM remain, with some threatening to side with the monarchists and campaign against the referendum which must be passed by a majority in a majority of the six states.

Mr Turnbull said the only direct election model which would work was the US system, with a complete separation of the legislature and executive. It would require a massive constitutional overhaul.

"I think the Irish model, which was given a fair bit of consideration here, with a directly-elected ceremonial president, cannot work in Australia unless you can remove the power of the senate and that's inconceivable," he said.

Many monarchists were claiming a qualified victory last night. It had always been their strategy to test any republican model in a referendum which they believe they can win with the help of the smaller, more conservative states.

The head of Australians for a Constitutional Monarchy, Mr Lloyd Waddy QC, said despite some opinion polls showing 66 per cent of voters want to elect a president, the country was split on the issue of a republic.

He said in the postal vote for half of the 152 delegates to the two-week convention the republicans had won three million votes while the total anti-republican vote had been two million.

"There can be no compromise on our side . . . We were here to point out the excellencies of our present system and measure up all the republican alternatives against it and none of them stacked up in my view."

The proposal now goes to parliament which can amend it before it goes to the people, probably towards the end of next year. Mr Howard said yesterday if the republic was successful a new president should be in place by the centenary of federation on January 1st, 2001. However, he also warned if the proposal failed then republicanism should be taken off the agenda to allow the centenary celebrations to proceed unhindered by controversy.

The real campaigning to win the hearts and minds of Australians can now begin. Mr Howard's Liberal Party will allow a conscience vote on the issue while the opposition Labor Party support the republic.

However, Mr Howard's coalition partner, the National Party, which is strongest in the bush, is opposed to it. Its leader in the Senate, Mr Ron Boswell, said the republican model was like a Christmas tree which had been adorned with so many lights and baubles it was in danger of falling over.

"Now the National Party can switch its machine on and go out and campaign for the status quo, not because we're all in love with the House of Windsor. . . but we're not getting carried away with the emotions on this, we're looking at the nuts and bolts."

The Constitution Convention might just be over but the republican debate has only just begun. Editorial comment: page 15