The most hotly contested election in the history of the Organisation of American States will be decided on Monday when 34 member states choose a new secretary-general.

The withdrawal from the race of Francisco Flores, the candidate who was backed by the US, means that Latin American influence over a body traditionally dominated by Washington is likely to increase.

Mr Flores, a rightwing former El Salvadorean president, pulled out late on Friday, arguing that his candidature had created a “dangerous situation, where instead of uniting the region it turned out we have divided it”.

José Miguel Insulza, the socialist Chilean interior minister who has been backed by Brazil, Argentina, Venezuela and Chile, is running against Luis Ernesto Derbéz, the Mexican foreign minister. Mr Derbéz, a member of the governing rightwing National Action party is backed by Mexico and Canada.

Mr Flores withdrew after the failure of intense lobbying efforts by Washington to persuade small Caribbean states to shift their votes to the El Salvadorean candidate. Most of the 14 Caribbean states are expected to cast their votes for Mr Insulza. Oil-rich Venezuela lobbied fiercely on behalf of the Chilean.

El Salvador is one of the US's most loyal allies in the region, being one of a handful of Central American countries to send troops to Iraq and the only country in the region still to maintain a military presence there. By contrast, Mexico and Chile resisted pressure in 2003 to support the allied invasion and abstained from voting in the UN Security Council, where both countries were temporary members.

At the same time, however, both nations have followed market friendly economic policies with a reasonable degree of success and have generally been seen as friendly to the US.

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