Announcing what he called a "big breakthrough", Australia's acting Prime Minister Tim Fischer said the WTO director-generalship would first be taken for three years by Mike Moore of New Zealand.

Mr Moore would then be succeeded by his rival candidate from Thailand, Dr Supachai Panitchpakdi, who would serve the remaining three years of the original six-year term.

Thailand's deputy prime minister Dr Supachai Panitchpakdi will take up the WTO reins from Mr Moore

Speaking on Australian radio, Mr Fischer said that Australia had brokered the power-sharing arrangement.

However, the deal still needs to be formally approved by the WTO council, meeting in Geneva.

Earlier on Sunday, a Thai official had said that his government was "confident and optimistic" that the US and the EU would be able to support such a compromise proposal.

Leaderless for three months

The world's trade watchdog has been without a leader since the end of April.

Former US Ambassador to the WTO Michael Smith believes there are problems with the deal

Months of heated and sometimes vitriolic negotiations had failed to produce a deal, as the organisation's 134 member states were evenly split over who should lead the WTO.

The stalemate had threatened to deadlock the organisation during a time of rising trade tensions around the world.

The leadership dispute was not a battle between North and South, East and West or rich and poor countries.

Dr Supachai had the support of Japan, Australia, and most Asian countries.

Mr Moore, the preferred candidate of the United States and a majority of Latin American governments, was favoured by many developing countries as well.

The European Union was split over whom to support.

If all sides agree to the deal, the WTO will finally be in a position to enter the next round of global trade talks, scheduled to start this autumn.

In profile

Mr Moore, who will be the first to take the helm of the WTO, is a former prime minister of New Zealand.

The 50-year-old is a social democrat and comes from a strong trade union background.

He is a passionate supporter of free trade, but also an advocate for underprivileged and less powerful smaller states.

Dr Supachai is 52 years old and Thailand's deputy prime minister and commerce minister. He is a respected economist with much experience in trade negotiations.