Vaclav Klaus is the last EU leader holding out on signing the treaty, which aims to streamline EU decision-making and must be ratified by all members to take effect.

On Friday, the staunch eurosceptic accepted a proposal by the Swedish EU presidency to handle an opt-out from the treaty which he demands.

"This proposal corresponds to the president's expectations and he can continue to work with it," said Klaus's office.

Critics of the Czech president regard the demand as another attempt to delay the ratification.

However, Friday's statement by Klaus's office is the second glimmer of hope for the EU in a week, after the president suggested just days ago that he would ultimately sign.

"The train carrying the treaty is going so fast and it's so far that it can't be stopped or returned, no matter how much some of us would want that," he said last Saturday, fueling hopes that the treaty might take effect soon.

Exemption clause on property

Two weeks ago, Klaus asked for an exemption from the treaty that would prevent ethnic Germans forced out of his country after World War II from reclaiming their property.

Britain and Poland won similar exemptions during the treaty negotiations in 2007 – Catholic Poland was assured it would not be forced to allow gay marriages, and Britain promised that EU laws and courts would not prevail over its own judicial system.

Stefan Fule, Czech minister for EU affairs, said the Czech exemption would be a general one, comprising a comma and the words "Czech Republic" attached to "Great Britain" and "Poland" in the treaty's protocol.

Recognizing that the chances that Klaus might yield were slim, Sweden, which currently holds the EU's rotating presidency, and the Czech cabinet set out to work on the wording of the exemption, which they hope to submit to the EU for approval at a summit next week.

European Commission held up

The EU has been waiting in suspense for Klaus' signature, the last step in the Czech ratification process after local lawmakers approved the treaty earlier this year.

The impasse means that European Commission chief Jose Manuel Barroso, who was last month granted a second five-year term, is unable to nominate a new commission, because it is unclear what legal basis he should use.

The mandate of the current commission – the EU's executive arm – expires at the end of October.

The body that draws up legislation impacting the lives of about half a billion Europeans and policing the application of EU laws is likely to remain a lame duck until the future becomes clearer.

This may take some time as Klaus has also linked his signature to a go-ahead from the top Czech court, which is currently assessing the treaty's compliance with the country's Constitution following a complaint filed by a group of eurosceptic senators.

Like President Klaus, the senators fear the treaty will give too much power to Brussels and threaten Czech sovereignty.

The court has said it will discuss the complaint in a public hearing on Tuesday, but it is unclear how long the process might take.

Concerns over further hurdles

The president of the European Parliament, Jerzy Buzek, said on Friday he expected the Lisbon reform treaty to come into force before the end of the year while admitting that challenges persisted.

"It's my personal opinion: I can say that it's a very high probability that we will have our Lisbon Treaty in place at the end of this year," he said in an interview.

However, Buzek voiced concerns an opt-out deal with the Czechs could "bring problems in other member states".

"We would like to have a solution proper for the Czech Republic and for President Klaus to sign the Lisbon Treaty. But of course we wouldn't like to have problems in other member states," he said.

Concerns that more countries may try to negotiate footnotes to the charter intensified last week after Slovak Prime Minister Robert Fico said he may ask for an opt-out clause for his country if the Czechs succeed.

rb/AFP/Reuters

Editor: Kyle James