By Agencies

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Colombia's constitutional court has rejected a referendum to allow President Alvaro Uribe a chance to seek re-election after eight years in office.

The court's nine magistrates ruled the referendum unconstitutional by a margin of 7-2, denying Uribe a chance to run for a third consecutive term in May election.

The conservative leader, who had not confirmed he wanted to run for a third term, accepted the court's decision on Friday.

"I accept and I respect the decision of the constitutional court," Uribe told reporters.

The decision marks the start of a tough campaign among rivals seeking to replace Uribe, who after almost eight years in power became one of the country's most popular presidents for his US-backed campaign against leftist guerrillas.

Possible successors

Any successor in Latin America's fourth largest oil producer would be unlikely to diverge far from the president's security policies.

Juan Manuel Santos, a former defence minister, closely associated with Uribe's security successes against Farc leftist guerrillas, led in most opinion polls when Uribe was not included as a candidate.

Sergio Fajardo, an independent praised for his performance as mayor of the major city of Medellin, is also making ground, while another former defence minister and three-time candidate Noemi Sanin has recently gained in the polls behind him.

During Uribe's presidency, Latin America's oldest insurgency has ebbed and foreign investment has flowed steadily into Colombia, a country once considered a byword for a violent, failed state.

A political transition could unnerve the local peso currency and benchmark TES debt markets as investors absorb the change in command, but long-term, most analysts see continuity in Colombian stability.

"While a constitutional court rejection may trigger a knee-jerk negative (peso) reaction, this is likely to be transitory as no major shift in economic, regulatory or security policy is expected," RBC Capital Markets said.