European Commission President Jose Manuel Barroso suffered a blow when Irish voters rejected the EU's new Lisbon Treaty, but he remains on course for a second term at the helm of the bloc's executive next year.
Mr Barroso was clear favourite to be named Commission president for five more years until the European Union was plunged into a new treaty crisis by the June 12 referendum in Ireland.
Mr Barroso is clear favourite to be named Commission president for five more years
The centre-right former prime minister of Portugal has had his differences with EU leaders, notably those in France and Germany, over the Commission's plans to inject more competition into power markets and clamp down on carbon emissions.
The Irish No has led some critics to point the finger of blame at his door but Mr Barroso (52), still can count on support from most of the EU's 27 member states after showing sensitivity to their concerns on policy issues, diplomats said.
"It's going to be tough to beat Barroso," a source close to French President Nicolas Sarkozy said. "He is a market liberal but he has also become very pragmatic."
German Chancellor Angela Merkel, irked by the Commission's push to break up power utilities and curb carbon dioxide emissions which will hurt German carmakers, favours former Austrian leader Wolfgang Schuessel over Mr Barroso, people familiar with the situation said.
But France and some other EU countries have not forgiven the Austrian for forming an alliance with the far-right part of Joerg Haider in 2000 and are firmly opposed to Mr Schuessel's candidacy, they said.
Mr Barroso has also been considered a potential candidate for the new post of the president of the European Council, the powerful body representing EU governments which has a decisive say over the bloc's legislation and policies.
The creation of that job is one of the main institutional changes for the EU included in the Lisbon Treaty which was designed to give the bloc stronger, simpler leadership.
Most EU leaders remain determined to get the treaty introduced, but its rejection by the Irish voters has, at the least, made it almost impossible for the new rules to come into effect in January as previously hoped.
That makes the next presidency of the Commission the only certain vacancy for 2009, and all the more coveted for it.
Mr Barroso's chances of getting a second term inevitably took a knock with the Irish referendum vote.
It was the third time on his watch that voters in EU member states have rejected a new treaty - France and the Netherlands in 2005 torpedoed a planned EU constitution which was eventually reworked as the Lisbon Treaty.
Critics say the Commission's plans to open the EU's farm markets as part of a world trade deal and its objections to tax cuts to offset soaring fuel prices alienated some Irish voters.
Mr Barroso had tried to help the 'Yes' camp in Ireland by steering clear of some issues that might have irked the Irish in the run-up to the referendum, Commission-watchers said.
He delayed debates on the EU's budget reform and tax harmonisation - both sensitive topics in Ireland.
It benefits from big EU farm subsidies, which many member states want to cut, and jealously guards its right to set low corporate taxes to attract investment.
Mr Barroso has acknowledged that it was a mistake for Ireland's top man in
Brussels, Internal Market Commissioner Charlie McCreevy, to admit publicly that he had not read the new treaty.
But in Paris and Berlin, MrBarroso is seen as someone who can temper the free-market instincts of Mr McCreevy and the bloc's trade chief Peter Mandelson which have clashed with the interests of France and Germany on occasions.
"Barroso will be the next Commission president because he is already a good president," a French minister said recently, asking not be named. "He's not to blame for the Irish 'no.'"
Mr Barroso's candidacy would also fit with the expected continuation of the centre-right majority in the European Parliament after next June's elections for the EU legislature.