THE Irish and British governments are now almost certain to lose a row with Spain over what heads of government did or did not agree early on the Wednesday morning at last month's Amsterdam summit.

The result is that any of the 13 other member-states will be able to veto participation by Dublin or London in aspects of the Schengen agreement on passport-free travel that they would like to sign up to such as police or customs co-operation.

Although Spain alone wanted to preserve its veto - to block any potential move by Britain on Gibraltar - and the others are unlikely to use it in practice, the resulting exclusive Schengen club with its Spanish, blackball is a legal framework that is particularly unwelcome in Dublia and one against which Irish diplomats had made a strong case in the run-up to the summit.

But the row also reflects the shambolic final hours of the summit and raises, not for the first time, questions about whether this is the best way to do business on such a sensitive issue as a treaty on the future of Europe.

The Luxembourg Foreign Minister, Mr Jacques Poos, told The Irish Times this week that the treaty would certainly end up containing the disputed Spanish amendment and a senior Luxembourg diplomatic source "confirmed that the Presidency was determined "not to reopen the treaty negotiations" by allowing a challenge to the wording.

The same diplomatic source insisted that when the Presidency replayed a tape of the summit - only available to the Presidency - it was clear that the intervention on the key clause by the Spanish Prime Minister, Mr Jose Maria Aznar, had not been challenged. The Dutch Prime Minister, Mr Wim Kok, had later asked if there were any objections to the section. There had been none, and so the Spanish amendment stood.

IRISH diplomats insist and British sources confirm, however, that Mr Aznar was challenged to circulate the text of his amendment by the British Foreign Secretary, Mr Robin Cook. He had not done so, and so both Irish and British delegations assumed that the acceptable Dutch text stood unaltered and had not responded to Mr Kok.

They say that several delegations have since confirmed that the first time they saw the new wording was the next day in the consolidated text put out by the Dutch as the agreed treaty. And they entirely reject the suggestion put about by unkind observers that Mr Bruton and Mr Blair had "blinked", allowing Mr Aznar "to pull a stroke".

What is clear, however, is that as the hour advanced well past midnight and into the early hours the negotiations on a treaty that will shape the future of Europe became a little haphazard.

Exhaustion was setting in and the German Foreign Minister, Mr Klaus Kinkel, would later admit that the section of the treaty dealing with flexibility, seen as the key constitutional innovation of the summit, only got the most cursory of perusal, leaders rushing to back an amendment from Mr Blair and then passing on, approving the Dutch text.

While their tiredness may not have in reality made a substantial difference to the result on flexibility, the same is not true of two other crucial issues: the re-weighting of votes in the Council of Ministers and the powers of the Parliament.

The current Council voting system favours small countries, and the larger ones had seen its rebalancing in their favour as a crucial quid pro quo for their willingness to give up a second commissioner.

In the end, unable to agree, the leaders simply put off to another day reform of both Council and Commission.

Yet the Luxembourg Prime Minister, Mr Jean-Claude Juncker, a veteran and astute observer of EL summits, admitted to journalists this week that he was convinced a couple more hours' work would have resolved the issue. Two hours on top of two years' work, for what many saw as the key reform of the treaty to prepare for enlargement.

DIPLOMATS describe the last hours of the talks as chaotic, with leaders cutting across each other and speaking simultaneously. And when the Germans at the last moment insisted on retaining veto voting in a range of areas where most were willing to relax it, the heads of government forgot that their reluctant acquiescence should logically have had a knock-on effect on proposals to extend the powers of MEPs.

The result was that a substantial extension of MEPs' rights to legislate jointly with the Council of Ministers went through on the nod - an attempt to rectify the mistake at a subsequent ambassadors' meeting has been blocked for the same reason the Irish will not get their way on Schengen. To reopen negotiations now would be to open up a Pandora's box.

The Parliament is thus by far the biggest beneficiary of the summit, but by accident.

And, to their horror, diplomats discovered that heads of government had also failed to remove from the draft text controversial French and Dutch proposals to fix in perpetuity the headquarters of the Parliament in Strasbourg and Europol in The Hague.

Is this really the best way to legislate for the future of Europe? The reality is that the issues left to be resolved at the summit are invariably among the most important for member-states. Yet leaders negotiate these final most sensitive elements of a treaty in a room on their own, locked away from the diplomats who have brought the talks to this point and actually know the issues back to front.

As 4 a.m. approaches, tempers get frayed, eyelids droop. Even the supermen we elect as our leaders are mere mortals ...

And so, to pick up the pieces.

Given the particular sensitivity of Gibraltar to domestic Spanish politics it is likely Dublin will agree to back down gracefully in exchange for a solemn declaration that the veto, will only be used against us most exceptionally. In the nicest possible way the Spanish will be told they owe us one.

And in the nicest possible way diplomats will in future leave their leaders at the conference door with the injunction to "keep your eye on the ball, Taoiseach".