French Socialist Dominique Strauss-Kahn is tapped to replace Rodrigo de Rato as head of the IMF in October. - AP

The European Union chose Dominique Strauss-Kahn yesterday to head the International Monetary Fund (IMF), putting the former French finance minister in line to succeed Rodrigo de Rato in October.

Portugal, which leads talks between all 27 EU nations, said Europe would support Strauss-Kahn after Spain's de Rato steps down to spend more time with his family.

"Ecofin (EU finance ministers) agrees to support D. Strauss-Kahn for IMFdirector," the Portuguese Government said in a message sent to reporters.

Strauss-Kahn, 58, had previously been tipped to challenge unsuccessful French presidential candidate Segolene Royal for the leadership of the Socialist party and turn around the troubled French left.

French Finance Minister Christine Lagarde said the calibre of Strauss-Kahn and his international experience had allowed him to swiftly win support from other EU nations.

EU and US top jobs

Europe and the United States have divided the top jobs at the two major financial institutions, with the EU picking the head of the IMF and the U.S. choosing who should lead the World Bank.

The IMF board is expected to approve the candidate Europe had chosen.

But British Finance Minister Alistair Darling said it was time for the system to change and the post should still be open to candidates from other parts of the world.

"We think there needs to be an opportunity for all members of the IMF to make their own assessment as to individual candidates ... and then, of course, pick the best candidate for the job," he told reporters.

"We don't believe that the situation whereby it is assumed that there will automatically be a European candidate for the IMF just as there is an American candidate for the World Bank is sustainable in the long term."

He said Britain would have liked more time to select someon he described Strauss-Kahn as a 'credible' candidate.

Dutch Finance Minister Wouter Bos earlier said it was still an 'open race' between Europe and candidates from other parts of the world.

But Lagarde said questioning how the IMF candidate is selected should also mean challenging the U.S. role in picking the World Bank president - picking at a recent wound that saw Europeans unhappy at Paul Wolfowitz' slowness to heed calls to resign from the bank following an ethics scandal.

"If this tradition is questioned, it should be for the two institutions at the same time," she said. "Every candidate from every institution will be open to hearing every concern from developing countries."

French President Nicolas Sarkozy had canvassed the U.S. and other European countries for their support for Strauss-Kahn - even though the Socialist earlier said it would be a 'betrayal' for him to join Sarkozy's new government.

Sarkozy was more generous.

"He is France's candidate, but I hope he will be Europe's candidate," he said.