WASHINGTON (Reuters) - President Barack Obama is poised to make an announcement soon on the leadership of the new U.S. consumer financial agency and is leaning strongly toward Harvard law professor Elizabeth Warren for the role.

He has a choice of naming her on either a temporary or a permanent basis.

Here are Obama’s options and how they could play out:

NAMING WARREN ON TEMPORARY BASIS

Warren, whom Obama referred to last Friday as a “dear friend” and who first conceived of the idea of the consumer agency, is all but certain to be chosen by Obama.

The landmark financial reform law that created the Consumer Financial Protection Bureau gives his administration the option of setting up the agency within Treasury on an interim basis under the leadership of an interim director.

This would allow Obama to avoid a heated battle in the Senate to confirm Warren, who is fiercely opposed by Wall Street and many Republicans. Her critics contend she would take a heavy-handed approach toward regulating banks and other financial firms that could hurt their competitiveness.

An advantage to this option is that it would enable the administration to get the consumer agency up and running more quickly. Obama sees the agency’s creation as a signature accomplishment and the administration is concerned that a delay of several months in getting confirmation for its new director could be a setback to the effort.

“The big issue seems to be the politicization of the new agency and the process, and, in an odd way, putting up an interim director somewhat diffuses that,” said Kevin Petrasic, a lawyer at Paul, Hastings, Janofsky & Walker LLP, who follows banking issues.

If Warren is the pick, an interim appointment allows for a trial run to see how politicized her tenure might be. “It’s probably the least objectionable of not very many good alternatives for the administration at this point,” Petrasic said.

FORMAL NOMINATION OF WARREN TO A FIVE-YEAR TERM

If Obama decides to formally nominate Warren as the new director of the consumer bureau, she could serve for a term of up to five years, if she receives Senate confirmation.

Although the fight to confirm Warren would be contentious, there are some advantages to the White House in embracing such a debate.

Obama’s Democrats are at risk of crushing losses to Republicans in the November congressional elections. Warren is a hero to the liberal base of the Democratic party because of her willingness to take on Wall Street.

A nomination fight could energize liberal activists and consumer groups, helping to spur Democratic turnout for the November 2 election.

The White House also sees the issue as one that would resonate with middle class voters.

If Republicans were to try to block Warren, Obama and the Democrats would paint them as siding with the financial industry over ordinary consumers at risk of financial hardship caused by hidden credit card fees and products such as predatory loans.

However, if Republicans end up making big gains in the Senate in November, it could prove even harder to confirm Warren and the White House would run the risk of leaving the consumer agency rudderless for several months.

RECESS APPOINTMENT

If Obama wanted to avoid a lengthy Senate fight, another option he could use is a “recess appointment” -- naming Warren on a temporary basis at a time when the Senate is not in formal session.

This is seen as the least likely option, at least for now. If Obama were to use the recess appointment any time soon, Warren would only be able to serve for about a year under the law.

The Senate is currently in session for a few weeks so this option would not be available until October.

Another disadvantage is that a recess appointment could antagonize moderate Democrats and Republicans, costing the White House political capital. Those lawmakers might see such an appointment as going around the legislative body.

One of the reasons a recess appointment seems so unlikely, is that if it was Obama’s preferred course, he could have ended the whole drama weeks ago by making a recess appointment while the Senate was on its summer break instead of waiting until this week when lawmakers have just returned.