Gonzalez at bay in corridas of power: Spain's Prime Minister, under fire at home, is making a last stand on the shaky ground of European unity. Phil Davison reports from Madrid

MUCH BLOOD has been spilt in the sand of the Plaza de Toros, the city's bullring, but the only splashes of crimson today will be from the rose-and-clenched fist symbol of the Socialist Party of Spanish Workers (PSOE) as the Prime Minister and his party celebrate 10 years in power.

The bulls that Felipe Gonzalez will soon have to face are falling popularity, economic crisis and the brittleness of the platform upon which he has staked his career: a united Europe. His chosen arena: a general election, due by next autumn but possible as early as the new year.

Today's rally was called ostensibly to mark the 10th anniversary week of the stunning 28 October 1982 election victory that propelled him to power. But in effect it will launch the party's pre-election campaign, a pre-emptive strike against the growing strength of opposition from left and right, and an attempt to revive Mr Gonzalez's appeal.

Until now, he has refused to confirm that he will run as party leader for a fourth time. Indeed, he has admitted to trusted foreign leaders that he is weary of domestic politics, and many of them favour him to succeed Jacques Delors as European Commission President in 1995.

'Fifty would be a good age to retire,' he joked in January, two months before his half-century. 'God spare us from a prime minister for life. That would be horrific,' he said on another occasion. But with no viable successor in sight, the posters advertising today's rally tell the tale. 'The Force of the Future' is the slogan, somewhat ironic since they show a stylised picture of Mr Gonzalez after his 1982 victory. Pointedly, the poster shows him hand in hand with his deputy leader, Alfonso Guerra. The latter resigned the deputy premiership last year, soon after it emerged that his brother Juan had been operating his private business out of a government office in Andalusia. Alfonso Guerra heads a more radical party faction often at odds with Mr Gonzalez's pragmatism.

Fewer and fewer people claim to know or understand the man who started out as a Seville lawyer and swiftly worked his way up the ladder of the PSOE while it was underground during the Franco dictatorship. Some of those who still claim to be close to him predict that he will seek to lead the party to another victory, but will step down as leader in mid-term to take the Delors job.

Latest opinion polls suggest that the PSOE, currently filling half the seats in the 350-seat Cortes - one short of an absolute majority - could lose 20 seats at the next election. The conservative Popular Party (PP) could gain 14 to reach 121, while the left-wing United Left (IU) could add 17 for a total of 30 seats.

Such statistics have led to increasing speculation that Mr Gonzalez may be forced into a coalition with smaller parties, such as the Basque or Catalan nationalists, the IU or part of it, or even the right-wing PP, in what is being billed as a 'grand coalition' to see the nation through the crisis.

PSOE officials reject such talk, but opposition leaders are more circumspect, and there is little doubt that horse-trading has already begun. Even the ailing father of King Juan Carlos, Don Juan de Borbon, threw fuel on the fire when, in a rare political comment, he described the nation as 'torn apart and with its unity under threat'.

Since taking Spain into the EC in 1985, Mr Gonzalez has increasingly looked outwards towards the rest of Europe, and has been heavily criticised for neglecting the party's original social pledges at home. He is credited with pruning loss-making state industries, badly wounding the monster of Basque terrorism, improving the lot of women and overhauling the armed forces.

But his administrations have been dogged by persistent corruption scandals; unemployment and inflation are way above the EC average; and he is widely perceived to have moved steadily to the right.

From a middle-class milieu, he has looked increasingly comfortable in the Neo-classical Moncloa Palace. Observers noted that he stopped singing the Internationale at party conferences several years ago. 'I've got a terrible ear for music,' was his defence.

Above all, the uncertain future of Europe, upon which he has gambled his political future, is now threatening his reign. Like a lad from the slums who would press his nose against the windows of a posh golf clubhouse, he finally talked his way in, only to discover that wealthier members are disillusioned and the club is in the doldrums. After Maastricht was signed, most Spaniards took Mr Gonzalez's word that they were part of the EC and would never look back. Now, with Europe in disarray and the peseta devalued, the government has been forced to launch a public campaign to explain Maastricht to an increasingly sceptical nation.

(Photographs omitted)