THE most powerful man in Iraq sits on the floor of a modest room, off a narrow alley in a provincial city south of Baghdad. His gown is dark and threadbare. His face is sandwiched betweeen a long white beard and a black turban. On the rare occasions that he leaves his home, it is to pray at the nearby shrine of Imam Ali, the founder of Shia Islam, in Najaf.

Grand Ayatollah Ali al- Sistani has never met an American official or soldier. He did not vote in Iraq’s elections last month. And yet this religious recluse could wield more influence over Iraq’s destiny than all the foreign troops and Iraqi politicians put together.

The Shia List, which he endorsed, looks certain to be the biggest group in Iraq’s new 275-strong assembly when the election results are announced any day now. It will therefore be the dominant voice in the formation of a new government and the drafting of a new constitution. That means the 74-year-old cleric is likely to play a key role in determining whether Iraq becomes an Islamic state or a secular democracy and whether its rival communities peacefully co-exist or sink into sectarian conflict.

Anyone doubting Ayatollah al-Sistani’s influence should consider the key events of the past year. The huge Shia turnout in January’s election was the result of his simple fatwa instructing the faithful that voting was a religious duty.

That the elections were held at all was largely due to him. When the US-led coalition proposed a transfer of power without letting the people cast their ballots, a single edict from Ayatollah al-Sistani brought hundreds of thousands of Shia protesters on to the streets until the Americans backed down.

Now that the Shias are set to govern Iraq for the first time in more than 500 years the country and the rest of the world want to know what kind of nation he wants to build.

His supporters insist he is dedicated to creating a tolerant, democratic state that respects the rights of all Iraq’s minorities. His critics fear the birth of a new theocracy similar to that in neighbouring Iran, where he was born.

Senior members of the Shia coalition are desperately trying to reassure Iraq’s Sunni minority that it will not be marginalised, the Kurds that their automony will not be threatened and other religious minorities that they will not become second-class citizens.

Ibrahim al-Jaafari, the leader of the Shia al-Dawa Party and a potential prime minister, pointedly refers to the ayatollah as “Mr”, not “Sayyid” — the title given to a direct descendant of the Prophet Muhammad.

“I think Mr Sistani does not want to go into the details of the political process. He just wanted to be sure that the constitution, for example, was written by elected people,” he told The Times from his office in the Green Zone in Baghdad.

On the issue of Islam’s role in the future Iraqi constitution, he is even more opaque. “Even Americans wrote on the dollar ‘In God we trust’,” he said. “Does that mean that all Americans believe in God? No. It refers to the majority. We are going to explore with a very frank and open mind other constitutions, other countries.”

But many Iraqis have witnessed the rise of the long-oppressed Shia majority with alarm.

In the Shia-dominated south religious militias have waged a campaign of murder and intimidation against alcohol sellers — primarily Christians. They have have shut down cinemas and intimidated musicians and CD sellers.

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