Spain has blocked the appointment of Yves Mersch to the European Central Bank's executive board, delaying the process of filling a post that is critical to tackling Europe's debt crisis.
It follows opposition from the European Parliament, which voted against Mersch on 25 October because it wants more women in the European Union's higher echelons.
EU leaders can still push through the appointment, but will have to do so face-to-face at one of their upcoming summits before the end of the year, probably in December.
The European Council had tried to secure Mersch's appointment via a "written procedure", a fast-track method that would have put an end to the months-long battle to confirm the banker's candidacy.
But Spain said on Monday it was opposed to using such a procedure.
Spanish officials said there had been insufficient discussion of Mersch's candidacy among EU leaders and they wanted to ensure that a proper debate took place, hence their decision to block his fast-track approval.
The European Council said in a statement that the issue would be discussed soon. EU leaders will meet in Brussels on 22-23 November, when they are scheduled to discuss the next long-term EU budget, and again on 13-14 December, when they will discuss economic issues.
If a unanimous decision on Mersch cannot be reached, then a weighted-voting system will be used, officials said. That will likely ensure Mersch is appointed since Spain, which is the only country to oppose Mersch, could not block his appointment alone.
Mersch, a conservative central banker from Luxembourg whose candidacy is strongly backed by Germany, was nominated to the six-person executive board, the ECB's top decision-making forum, in July.
Leaving the position vacant for much longer could create management strains at the bank, which is playing a central role in trying to keep the eurozone stable through the crisis. ECB President Mario Draghi told the European Parliament last month that he wanted Mersch's nomination approved.
Spain's move is a victory of sorts for the European Parliament, which has long opposed Mersch's appointment on gender grounds, saying not enough effort has been made to find a suitable woman for the high-profile post.
It is not clear if Madrid, which put forward a candidate of its own to fill the seat left vacant when José Manuel González-Páramo left in May, will re-nominate a rival for Mersch, a hawkish banker favoured by Germany.
If Spain were to nominate a female alternative to Mersch, Belén Romana García, a former director-general of the treasury, is one name that has been mentioned.