"We are at a crossroads. Our Europe needs a new political project", he concluded, according to AP.

France was seen as one of the main reasons for last December's failure to achieve agreement on the Constitution due to its intransigence on key issues.

But the Irish EU Presidency has instilled new hope into the process, which once again appears to be gaining momentum.

The Irish prime minister, Bertie Ahern, has been holding a series of bilateral meetings with leaders and will compile a progress report in March.

Two-speed Europe 'nothing new'

Mr Chirac also repeated his case for a two-speed Europe yesterday, saying that "pioneer groups" need to be set up that could move faster than others on some issues. This would allow "more flexibility", according to the French President.

"Certain countries will have the desire and the ability to move at a quicker pace: let's open the door for them", said Mr Chirac. On the other hand, "for others who are more hesitant, let's allow them as much time as they need".

"The more resolute should be able to build ... pioneer groups which would be called upon to clear up certain fields in which Europe could integrate more, but it is the whole of Europe that would benefit", he concluded.

And he reminded his audience that this idea was "nothing new" and that a two-speed Europe already exists in areas such as the Schengen agreement on border controls and the single currency - which three EU countries have decided not to adopt.

Budget cannot rise indefinitely

Turning his attention to the EU's budget for the period 2007-2013 - another contentious topic in the EU at the moment - he asserted that the EU's expenditure cannot "rise indefinitely" and that the system of fund redistribution needs to be refined.

Mr Chirac was one of six leaders who signed a letter to the Commission asking for a cap in the EU's budget from 2007 to 2013. But the Commission ignored the plea and produced proposals that actually increased the budget, causing a row with the richer member states.