Eriksson awaits England's fate on the Lisbon waterfront

Sven Goran Eriksson has many happy memories of Lisbon. While it is 13 years since he steered Benfica to the European Cup final, his affection for the Portuguese capital is such that he still owns a property in one of its more fashionable districts. When he returns to the city this weekend it will, however, be to uncharted territory. Eriksson may have had the run of the city, Sporting Lisbon fans permitting, in the early 1990s, but one district he would not then have ventured into was the eastern waterfront. In Eriksson's time it contained an obsolete oil refinery, a slaughterhouse and crumbling warehouses.

Tomorrow this once derelict area will welcome the cream of European football to the futuristic Pavilhao Atlantico for the Euro 2004 finals draw. By the banks of the Tagus, under the shadows of the 12-kilometre Vasco da Gama bridge - which was designed and built with British expertise - Eriksson will learn the identity of the teams barring England's immediate progress in the 12th European Championship.

The location is symbolic as well as practical. Portugal wishes to use Euro 2004 to showcase and accelerate its development, notwithstanding domestic concerns about the £285m cost of building and rebuilding 10 stadiums. It is an ambition Eriksson and the Football Association would appreciate. They hope the tournament will signal England's return to the first rank of footballing powers on the back of astute management and talented youth. The process, which began in World Cup 2002, is intended to reach fruition at the 2006 competition. Next summer will indicate the extent of Eriksson's progress.

The draw will begin at 11am tomorrow morning, proceedings being opened with a crooner and ended with a roll of 250 drums. In between, with the assistance of Pedro Pinto, CNN's Portuguese sports presenter, Fatima Campos Ferreira, a radio anchor who admits she knows little about sport, and, to confer legitimacy, Laurent Blanc, captain of France's victorious 2000 team, Gerhard Aigner, Uefa's outgoing chief executive, and his successor, Lars-Christer Olsson, will draw the teams from four pots.

The first contains the leading seeds, Portugal, France, Sweden and the Czech Republic. Portugal will be placed in Group A. England are among a heavyweight second quartet with Italy, Spain and Germany. The most dangerous floater, the Netherlands, are in the third pot along with Croatia, Russia and Denmark. Completing the draw will be Bulgaria, Switzerland, Greece and, making their bow on a major stage, Latvia.

Seedings were based on the performance of teams in qualifying for this competition and the 2002 World Cup. Had Beckham scored his penalty in Istanbul, and England held on to the lead, they would have climbed above the Czechs into the top seeds. That would have enabled them to avoid the co-favourites, France and Portugal, along with Sweden, whom England have not defeated in 35 years covering 10 meetings. However, they would have got Italy, Spain or Germany.

The best case scenario is to draw the Czechs, who, though a formidable side, have a poor record against England, the Croats and Latvia. The worst possibility brackets them with France, the Netherlands and a Swiss side which has begun to learn how to win away from the Alps.

Eriksson, who yesterday named Zinedine Zidane, Thierry Henry, Luis Figo, Pavel Nedved, Ruud van Nistelrooy and Raul as his six (non-English) players to watch in the summer, is cautious but optimistic.

"England should be one of the favourites," he said. "We have showed we can cope with any country, more or less. In competition we have lost only to Brazil and they will not be there. A lot depends on whether you have your best players available or whether [as in the World Cup] there are injuries." In the draw, he added, he would like to avoid Portugal and France and was pleased Italy and Germany were out of the immediate equation.

While the likes of Denmark and Czechoslovakia (as was) have won this competition, England have a poor record, only twice reaching the semi-finals: in 1968 and 1996. As usual they were late starters refusing, like the other UK teams, to enter the inaugural competition. The 17 countries who did were whittled down to four before, in July 1960, France hosted the last quartet in a five-day finale. The Soviet Union defeated Yugoslavia in the Paris final.

Forty-three years later, neither of those countries exist though Russia and Latvia, from the old Soviet Union, and Croatia, from the former Yugoslavia, are among qualifiers. The 16 finalists have emerged from 51 entrants and will take 23 days to produce a winner.

Portugal will open the tournament on 12 June at Porto's new Estadio Dragao. It will conclude at another new venue, Lisbon's Estadio da Luz, on 4 July. "I know the old Estadio da Luz very well [it is Benfica's ground]," Eriksson said. "The new one I have only seen from the outside. They tell me it is beautiful and I hope to play there in the final. That would be fantastic."

These are among six new stadiums, the others being extensively remodelled or rebuilt. Two are in Lisbon, one in the Algarve, golfing mecca to thousands of Britons, in the south of the country, and the rest in the north, predominantly around Porto, home of the Anglocentric port houses.

Wherever England are drawn, they will be quartered in the modern but plain Hotel Solplay in Lisbon's western suburbs. Some matches may require overnight stays but the Solplay, with its nearby training base at the evocative Estadio Nacional, will remain the team's base.

Eriksson's preparations will begin in earnest in February when England return to Portugal (unless the teams are paired tomorrow) to open the new stadium at Loule, near Faro. There will be another friendly, provisionally away to Sweden in March, before the 13 May deadline to submit a preliminary squad of 35.

England will then play two friendlies around Lancashire before Eriksson names his final 22-man squad by 2 June. England intend to arrive in Portugal five days later. They hope to remain until 5 July before returning, perhaps aboard "Sweet Chariot", with the Henri Delaunay trophy.