In a dispatch from Brussels, it quoted diplomats and officials as saying that Barroso "firmly favours" the two-time British government minister, who is close to Prime Minister Tony Blair.

Whoever gets the trade portfolio will be responsible for negotiating trade deals for all 25 EU member states, which between them account for a fifth of all the world's imports and exports.

He or she would also be a powerful key player in World Trade Organisation (WTO) negotiations, and maintain a close relationship with the US trade representative, Robert Zoellick.

France's Pascal Lamy has held the job since 1999 when he succeeded Britain's Sir Leon Brittan -- who, like Mandelson, had served as a British trade and industry secretary.

Blair picked Mandelson to fill Britain's chair in the enlarged European Commission earlier this month, but it is up to Barroso to determine who will do what job when his team takes over in Brussels in November.

Barroso, the former prime minister of Portugal, told reporters in Lisbon on Thursday that he expects to introduce the new commission during the week of August 23.

Making Mandelson trade commissioner would ensure that Britain keeps a high profile in the European Commission in the run-up to Blair's promised referendum on the EU constitution.