Tony Blair has decided to appoint Rowan Williams, the radical intellectual who heads the Anglican church in Wales, to become the 104th Archbishop of Canterbury in succession to the evangelical George Carey whom Lady Thatcher chose in 1990.
The decision, authoritatively confirmed last night to the Guardian, has still not gone through all formal procedures.
But it will nip in the bud growing anxiety among senior figures in the Church of England that Mr Blair's delay must mean he was considering overturning the favoured choice of the crown appointments commission. The prospect that the prime minister might pick the second shortlisted candidate - Michael Nazir-Ali, Bishop of Rochester - would be almost unprecedented for such a senior constitutional post at the head of the Church of England's hierarchy, at a time when calls are growing for it to be disestablished as the official state church.
Only this week the church's general synod confirmed its support for the prime minister and the Queen to have the final say. But the delay in choosing between Dr Williams, believed to be the commission's first choice, and Bishop Nazir-Ali has created a jittery vacuum in the church, which is being filled with speculation and gossip.
Informed sources in the Blair circle stressed last night that the formal appointment process - involving Buckingham Palace as well as No 10 - was lengthy and being rigorously adhered to. "The decision is pretty much taken, there is no big drama about it," one senior official said.
At the synod this week there had been highly sourced speculation that the prime minister, who takes a keen and deeply personal interest in religion, might have been reluctant to be bounced into a decision after Dr Williams' position as the crown appointments commission's favourite was leaked to the Times.
It was also argued that Mr Blair might wish to express a message about the multicultural nature of British society, as a place where members of the ethnic minorities can reach the highest positions in the land. New Labour has been sensitive that Britain has no minority figure with the status of Colin Powell, the son of Jamaican immigrants who became US secretary of state.
But any decision to overturn the expected choice of Dr Williams would have been immensely controversial.
This week the synod vote to uphold the status quo on the appointment of bishops reflected fear of losing the church's established status. A Blair upset would have provoked renewed calls for the Anglican synod to be allowed to make its own appointments.
Peter Selby, Bishop of Worcester, told the synod that the process had been cruel and undignified. Senior churchmen say that it will have to be revised next time.
Either candidate could hold office for nearly 20 years. Most believe Dr Williams will be more outspoken on social issues, whereas Bishop Nazir-Ali would have been more concerned with moral questions. Some evangelicals - the dominant wing in the modern church - view the prospect of Dr Williams with trepidation.
Dr Williams, archbishop of the disestablished church in Wales for the last two years, will be the first Archbishop of Canterbury chosen from outside the Church of England in modern times.
He is also the first archbishop for many generations to have school-aged children and, at 52, could have nearly 18 years in the job if he chooses to stay that long.
A distinguished academic and author of 14 books, he is a professed fan of The Simpsons and Father Ted. Swansea-born Dr Williams, a member of the Christian Socialist Movement, is theologically orthodox though supportive of women priests and sympathetic to homosexuals.
Neither Dr Williams nor Bishop Nazir-Ali would confirm yesterday whether they had yet been approached by Downing Street.
Although the appointments commission, which met in secret a month ago, is composed of church members, the prime minister has the final say over the appointment.
Mr Blair may choose either of the two names submitted to him by the commission or ask them to think again.