The deal agreed Friday foresees that Ireland will receive its guarantees as a legally-binding protocol which EU members would ratify alongside an unspecified future EU treaty, diplomatic sources said.

The agreement, backed by Britain, which had raised the most questions about the need for a protocol, then went to the leaders of the EU's 27 member states, present at the summit, for approval.

Ahead of the breakthrough, a draft summit statement drawn up by EU diplomats said that the EU would give a "legal guarantee that certain matters of concern to the Irish people will be unaffected by the entry into force of the Treaty of Lisbon."

The guarantees will be given as a formal decision of the EU's highest body, will be "legally binding and will take effect on date of entry into force of the Treaty of Lisbon," the draft said.

Analyses showed that Irish voters rejected the treaty in June 2008 out of fears it would end Ireland's neutrality and take away its control of tax law, family law and labor and social guarantees. The Lisbon Treaty is intended to streamline decision-making in the EU. The agreement in Brussels paves the way for a second Irish referendum on the matter.

Barroso gets backing

Meanwhile, EU leaders meeting at the two-day summit agreed on Thursday to unanimously back José Manuel Barroso's bid for a second five-year term in charge of the European Commission.

German Chancellor Angela Merkel has campaigned firmly for a quick approval for Barroso.

"We can not afford to have a long phase of uncertainty over several months," said Merkel.

However, the conservative head of the European administration in Brussels still has to seek confirmation from the European parliament.

Socialists and Greens have already announced their opposition and Conservatives and liberals do not have the necessary majority to re-elect Barroso.

New financial oversight

Financial matters were also on the agenda as European leaders backed a plan to restructure oversight of financial markets in Europe. In principle, the European Union agreed to create three pan-European regulatory bodies to control banks, insurers and securities markets.

The bulk of the oversight work would remain on the national level. Decisions by the European regulatory agencies could regulate cross-border disputes, but the European bodies would not be allowed to tell governments how to spend fiscal receipts.

British Prime Minister Gordon Brown was adamant on that point. He wants to shield the British financial sector from too much international regulation, diplomatic sources said.

EU leaders also postponed a decision on climate-change assistance for the poorest nations in the world, a move that was quickly condemned by environmentalists.

dfm/av/Bernd Riegert/Reuters
Editor: Jennifer Abramsohn