Slovenian prime minister Borut Pahor hailed the "historic decision" after the country voted in a referendum for a negotiated settlement to a bitter border dispute with Croatia.

he vote, passed narrowly with 51.5 per cent in favour, means that Croatia has cleared its last major obstacle to European Union membership.

Croatia is now expected to complete membership talks with Brussels over the next 12 months putting the Balkan country on track to become the EU's 28th member by 2012.

Mr Pahor was forced to give the referendum over the border deal after the country's opposition parties demanded a vote.

"This is a historic decision," he said. "This is a big success for Slovenia".

Croatian Prime Minister Jadranka Kosor, who spoke to Mr Pahor by telephone after the polls closed, told Croatia's state television she foresaw no further Slovenian action to bar Zagreb's path towards joining the EU.

"There will be no more roadblocks. Dialogue certainly continues. With this agreement ... we separated Croatia's (EU) talks from solving the border issue".

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