- guardian.co.uk, Thursday 3 February 2000 02.02 GMT
Thousands of demonstrators took to the streets of Vienna as Joschka Fischer, the German foreign minister, warned that the move could create a dangerous surge in nationalistic sentiment across the continent.
"It is clear what Haider's strategy is," warned Mr Fischer. "He wants to be chancellor."
Mr Haider and the leader of the Austrian People's party, Wolfgang Schüssel, are due to sign a "declaration of values of European democracy" at a meeting today with the head of state - ignoring a furious barrage of threats and protests from Europe, the United States and beyond.
Portugal, holder of the EU's rotating presidency, insisted that such a declaration would make no difference and that any coalition involving Mr Haider would lead to the diplomatic isolation threatened by the other 14 EU governments.
Antonio Guterres, the Portuguese prime minister, said: "It is a question of principles and values."
He warned that acting against Austria was more important than ensuring the smooth running of the EU.
Mr Haider won international notoriety 10 years ago by praising Hitler's "orderly" employment policies and lauding veterans of the murderous Waffen SS as "men of honour."
Mr Klestil sounded deeply unhappy in an interview due to be published today: "If I were to swear in this government, I would not do it out of personal conviction, because I fear that Austria would suffer internationally," he admitted.
But he added: "In a democracy, a parliamentary majority has to be respected. Personal preferences do not count."
Other options - such as forming an all-party government or calling new elections - seem unlikely.
Pressure continued as the fateful decision approached. The Belgian foreign minister, Louis Michel, said: "The new Austrian coalition would force an unacceptable breach in the resistance to a resurgence of fascist ideas in Europe."
Israel's prime minister, Ehud Barak, said Israel would recall its ambassador from Austria once the new government took power.
"The inclusion of an extreme rightwing party in the government of a European country such as Austria should outrage every citizen of the free world," he said.
Hubert Vedrine, the French foreign minister, said Paris would be "obliged to reduce bilateral relations to the lowest level" if the government were approved. "It was our duty to address this warning, not to meddle in the interior affairs of Austria, but because Austria ... is taking part in a common project that is not only economic but founded on principles and values," he added.
Strikingly, however, there were no statements by British ministers, apparently reflecting unease in London over Monday's unprecedented threat by the 14 to shun bilateral contact with Austria - and concern about the impli cations for the functioning of the EU.
The US secretary of state, Madeline Albright, while acknowledging that the people of Austria had the right to choose their government and that the US had no role in EU decisions, said Austria "should make peace with its past".
"It is up to the Austrian people to assure that Austria maintains its good international relations," she said.
In Helsinki there was dissent from the Finnish finance minister, Sauli Niinisto. "I want to send a clear signal that I'm against Haider," he said. "But I see a danger if we get into a habit of reacting to [the affairs of] member countries."
Since the bombshell dropped, European commission officials have repeatedly emphasised that the threatened action is by member states, but is rapidly becoming clear that EU business and decision-making could be disrupted.
"What 'bilateral' means will have to be seen in the days to come," a spokesman said.
Yet there is real ambivalence. Euro-enthusiasts have welcomed a chance to prove that there is a moral dimension to the integrationist project, while acknowledging that the gesture could create real complications and set a dangerous precedent.
As the European parliament held an emergency debate on the crisis, Simon Murphy, the leader of Labour's Euro-MPs, said: "Haider's call for a 'foreigner-free' Austria flies in the face of the fundamental principles on which the EU is founded."
As the row continued, a survey showed that 58% of Austrians believe the EU's reaction is exaggerated and that the president should approve the centre-right coalition.
It also showed the popularity ratings of the Freedom party at 18%, compared with 32% a week ago.
Last night around 10,000 people joined demonstrations. Crowds marched from Vienna's city hall to the chancellor's office on Ballhaus Square, shouting "Haider Out".
Mr Haider himself, who apologised grudgingly on Monday for jibes at France and Belgium, hurled new insults. "There is a lot of excitement in the European chicken pen - even though the fox hasn't even got in," he said in an interview with the German weekly Die Zeit.
