Fast-track treaty talks start in Portugal

The new treaty – known as the Reform Treaty – overhauls the EU's creaking institutions and was pasted together from the remains of the more ambitiously named EU constitution that was rejected in 2005.

But despite Lisbon's best efforts to keep a lid on the discussions, Friday's meeting is set to throw up a number of controversial points that have been slowly simmering since the treaty outline was agreed before the summer.

Among the most difficult issues are the British opt-outs on the Charter of Fundamental Rights and on justice and home affairs.

Several questions have been raised about their scope and how they will affect other member states in practice.

Poland is also anxious that its hard-won concession on the voting system - in the shape of a legislation blocking mechanism - will not be downgraded to a protocol rather than being written into the treaty.

The exact scope of the EU's common foreign and security policy is also set to be discussed as is the exact shape and power structures of the proposed EU diplomatic service.

Another issue is the statute of the European Central Bank. Its chief Jean-Claude Trichet wrote to the Portuguese presidency expressing concern that the bank's independence may be undermined by new wording in the proposed treaty.

Meanwhile there are a whole host of other problems that have cropped up with member states using the everything-on--the-table atmosphere of treaty talks to raise national bugbears – a time honoured strategy in EU negotiations.

Falling into this category are concerns raised by Austria on foreign student access to its universities and by Poland on the European Investment Bank. Warsaw wants a change in the bank's statute to make voting unanimous – Polish paper Rzeczpospolita reports that it wants to be able to block possible EIB investment into Russian monopoly Gazprom.

Two external factors

While all power-sharing discussions that take place within the EU are politically charged, these treaty talks have two important external factors weighing into the mix - elections in Poland and the pressure for a referendum on the EU treaty in the UK.

These two factors – the Poles go to the ballot box on 21 October - are set to make the countries negotiate even more toughly during the summit.

Even with no election in sight in June, it was Poland that kept fellow summiteers debating into the wee hours of the morning on the merits of a different voting system for the bloc. And now prime minister Jaroslaw Kaczynski is in political trouble at home.

Meanwhile, the UK's Gordon Brown is fighting calls to have a referendum by arguing that the secured red lines means one is not needed, indicating he will not be in a position to make concessions.

EU leaders are aiming to get the treaty done and dusted by the end of the year and ratified throughout the 27 member states before the 2009 elections – hoping to banish the political ghost of the rejected EU constitution that was spurned by French and Dutch voters just over two years ago.