Lula da Silva's rising popularity in polls has badly rattled markets

A few months ago almost all political analysts were agreed. Luiz Inácio Lula da Silva would make it through to the run-off to decide who should be Brazil's next president. But there he would be beaten, suffering a third successive defeat that would mark the end of his leadership of the Workers Party (PT).

Now, nobody is so sure. The government coalition has collapsed and the economic news is not good. Lula continues to ride high in the polls, and there is the very real prospect that for the first time Brazil will have a government of the left. Can he win, and what will he do if he does?

These are questions that are troubling the stock market. As former finance minister, Rubens Ricupero, said: "Uncertainty perhaps scares investors even more than a negative certainty."

This, however, would seem to be a very different Lula from the man who emerged as a trade union leader in the Seventies. A sheet metal worker, Lula was at the head of a series of strikes in the region known as ABC Paulista, an industrial belt outside the giant city of Sao Paulo.

The strike movement gave birth to the PT, the closest Brazil has to a mass party. At the time there was a military government to rail against, and strong currents in the party were revolutionary. Today Lula would undoubtedly argue that the PT's commitment to ending Brazil's rampant social injustice is unchanged. But both policy and presentation have been overhauled. The wild man beard has long since been clipped, and now he is most frequently seen in a well-cut suit. This is "Lula light", the experienced politician who is aware that to be elected the PT must broaden its base beyond its traditional support in the trades unions and civil service.

It explains the PT's alliance with the centrist PL (Liberal Party), which provides Lula's running mate, the textile baron Josè Alencar. "I have 50 years' experience in business," Alencar says, "and I've never broken a contract. I won't be part of a government which breaks contracts or is irresponsible from a fiscal point of view."

Alencar's appointment is intended to cement an image of the PT as the party of growth and production. "If we get poorer we can't pay our debt," he says. "The international bankers will applaud a government [that makes] the economy grow."

Lula promises to "enter into dialogue with all sectors of society" and focus on exports as the way out of the crisis. Last week he told an audience of business entrepreneurs:"In a capitalist system there must be an incentive to consume. But our society is unable to consume, because of our crazy interest rates policy, and the businessman is denied access to money." They were on their feet cheering, giving Lula hope that he may yet carry the country.