"I am delighted for the country. It looks like a convincing win for the 'Yes' side on this occasion," Irish Foreign Minister Micheal Martin told national radio.

The Tipperary South constituency in southern Ireland, which rejected the treaty by 53 percent in a first referendum in June 2008, backed it with 68.42 percent in favour and 31.58 percent against in Friday's vote.

A total of 3,078,032 Irish citizens were eligible to vote. Reports said turnout was around 50 percent across the country compared to 53 percent in 2008.

Official results of the referendum are due around 1630 GMT.

EU hails victory

Swedish Foreign Minister Carl Bildt, whose country currently holds the EU presidency, called it "an important victory for Ireland and for all of Europe."

He said it was just a matter of time until the EU "finally can push the button for the better European co-operation that the Lisbon Treaty will give us."

European Commission President Jose Manuel Barroso said Ireland's support for the treaty showed Europe's response to the global economic crisis has been positive.

"It (support for the treaty) shows the value of European solidarity and I am really glad with the result we are receiving from Ireland," Barroso told reporters. "It shows the very positive response that Europe is bringing to the economic and financial crisis."

German Chancellor Angela Merkel congratulated the Irish on Saturday.

She was speaking to reporters while in the German city of

Saarbruecken for German Unity Day celebrations.

"I would like to congratulate the Irish people on the outcome of the referendum and also my colleague Brian Cowen," she said. "This is an important step on the path to the Lisbon Treaty and I may say that Germany, on German Unity Day, is very happy about the outcome."

Ireland delivered a stunning blow to the EU in June 2008, when voters rejected the reform treaty by 53.4 percent. A second ‘No' vote could have risked plunging the bloc into another crisis and stalling long-delayed reforms.

The so-called Lisbon Treaty is aimed at simplifying and speeding up decision-making in the expanded 27-nation bloc.

Opinion polls pointed to a “Yes” vote

Opinion polls ahead of the vote had suggested the “Yes” camp was set to win comfortably this time, with voters likely to have been swayed by their fears of battling the sharp recession while cast on the fringes of the EU.

Leaders across the continent watched the poll anxiously, as most wanted an end to the constitutional paralysis in the EU since last year's Irish No vote.

Prime Minister Brian Cowen, and other pro-Lisbon leaders had expressed cautious optimism.

"It's an important day for the country and an important referendum," he said on Friday, according to the Irish Examiner newspaper's website.

There were concerns that some voters would use the referendum to punish Cowen's increasingly unpopular government over the spectacular collapse of Ireland's booming "Celtic Tiger" economy.

Ireland risked being marginalized

In the end, however, voters listened to Prime Minister Cowen's call to set aside their anger towards him over the economy and vote "Yes" to cement Ireland's position within Europe and help it recover from recession.

Analysts also warned that a second "No" could cost Ireland valuable goodwill from overseas investors who it relies on to fund a ballooning budget deficit.

An Irish "Yes" vote was bound to be seen as a boon for the former "Celtic Tiger", which was spared an Icelandic-style collapse due to its membership of the eurozone.

Experts say the country is still reliant on goodwill from Brussels and Frankfurt, where the European Central Bank is based, for its future recovery.

The referendum came at a time when many people in Ireland are struggling to come to terms with unemployment, higher taxes and the possibility of lower social welfare payments in the next austerity budget.

Analysts said Irish borrowing costs would likely drop and its banking stocks rise when stock markets open on Monday if the result was a "Yes."

rb/AFP/Reuters
Editor: Sonia Phalnikar