But the former Spanish foreign minister says, for the moment, all his attention is focused on the conflict in the Balkans.

"My unique concern, to which I am dedicating all my energy, is to bring to an end the crisis in Kosovo," he said.

Mr Solana's term at Nato runs out in December, but with news of a possible breakthrough in the Kosovo crisis he could take up his new job sooner.

Late-night session

His appointment was made after a late-night session of the EU summit in Cologne.

Mr Solana had emerged for some time as the favourite in the race to become the EU's first high representative for foreign and security policy.

He has skilfully maintained the consensus among Nato's 19 members during the Kosovo crisis and is highly regarded in Washington.

Kosovo deal dispels doubts

But with Nato involved in its first war he had declined to confirm his candidacy, and some EU members had expressed doubts about the timing of his appointment.

Neutral countries in the Union were also believed to harbour some doubts.

They were brushed away by the unexpected news that a peace deal with Yugoslavia may be within reach, and the German Chancellor, Gerhard Schroeder, made the announcement just after midnight.

Tricky role

Mr Solana is now expected to play a key role in what has been a notoriously difficult area for the EU and to give the Union a higher profile on the world stage.

His deputy will be a respected diplomat, the French ambassador at the EU, Pierre de Boisseau, nephew of General Charles de Gaulle.

What remains unclear is whether Mr Solana will now serve out his term at Nato, which runs out in mid-December, and who will be his successor.