FERENC GYURCSANY is nothing if not a survivor, and is likely to emerge strengthened from the violence in Budapest. A worried nation will rally around the Government, and the Prime Minister will comfortably beat off any challenges to his leadership, either from within his party or the opposition Fidesz.

Mr Gyurcsany, 45, has remodelled himself from communist youth leader to capitalist businessman. One of the richest men in Hungary, worth an estimated £10 million, he is determined to stick to his reform programme, cutting back on the bloated welfare state and nationalised industries and raising taxes.

Inspired by Tony Blair’s success in modernising Labour, he is determined to do the same to the governing Socialist Party, successor to the communists who ruled Hungary until 1990. A friend of Tony Blair and Peter Mandelson, Mr Gyurcsany has adopted the Third Way with enthusiasm. In October 2004 he hosted the Budapest Progressive Governance Summit, organised by Mr Mandelson’s Policy Network think-tank. He is well regarded on the international stage as a committed European and Atlanticist, free of the prickly nationalism that characterised some of his predecessors.

“Gyurcsany is very different to the old-fashioned people,” according to a British businessman active in developing the ties between the Blair Government and Budapest. “He belongs in the Western stream of thought. He wants to modernise Hungary and change the way it is governed, to withdraw the State wherever possible from owning economic assets.”

Mr Gyurcsany’s loyalty was rewarded in February when Mr Blair dropped in to Budapest to boost the Socialists’ election campaign. “I say to you, Ferenc, and to your colleagues, you have a lot to be proud of in this country, and I would say, well done, Hungary, you have come a long way,” Mr Blair told an election rally.

Since the collapse of communism in 1990, Mr Gyurcsany is the only incumbent Hungarian prime minister to win a second term. He is an enthusiastic blogger and attender of pop concerts. But the ghosts of the 1956 revolution and the legacy of communism still shape the Magyar psyche. There is widespread anger that former apparatchiks remain in power and prosper, while a third of the population live on or below the poverty line.

Mr Gyurcsany was born in Papa, western Hungary, in 1961. As an ardent Marxist he raced up the ranks of the state’s communist youth organisation until the one-party system collapsed. Like many former comrades, he proved a surprisingly skilled businessman and set up an investment company.

His path to riches was apparently greatly aided by his inside knowledge of, and connections within, the former regime. Klara Dobrev, his glamorous third wife, is the granddaughter of Antal Apro, an infamous party apparatchik during Hungary’s Stalinist-era in the 1950s.

Mr Gyurcsany’s charm on the international arena is not matched in domestic politics. He once suggested that every man wanted to trade in his wife for a younger model. He mocked Viktor Orban, the leader of Fidesz and a former prime minister, in a TV debate, saying that his election promises were so much “blah, blah”.

Budapest is abuzz with rumours that Mr Gyurcsany either leaked the transcript of his speech or authorised it. The reasoning goes: local elections are scheduled for October 1. The Socialists are trailing in the polls behind Fidesz, which has in the past flirted with the far Right. So violence on the street will bring wavering voters back into the centre-left fold.

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