Sarah Palin has been described as a reformer [AP]

Palin, 44, is the first woman to lead Alaska and is best known for aggressively pushing for oil drilling in the Arctic National Wildlife Refuge, a key part of McCain's energy policy.

The move could appeal to women voters who might have been disillusioned by Barack Obama's decision to pick Joe Biden as his Democratic running-mate instead of Hillary Clinton, who won 18 million votes in her Democratic primary battle with Obama.

At 44, Palin is three years younger than Obama and, like McCain, she calls herself a "maverick".

Mitt Romney, McCain's former rival for the Republican nomination, and independent senator Joe Lieberman, had also emerged as top contenders for the position.

Tom Ridge, the former governor of Pennsylvania, had also been linked to role.

Early on Friday, Tim Pawlenty, the conservative Minnesota governor, said it was "a fair assumption" he would not be joining McCain on the Republican ticket.

Historic nomination

McCain is preparing to accept his party's nomination for president at the Republican convention in St. Paul, Minnesota, next week.

On Thursday, Barack Obama, the Illinois senator, accepted the Democratic presidential, becoming the first African-American to win the nomination of a major US party.

By announcing his vice-presidential pick on Friday, observers say McCain was hoping to to divert attention from Obama, who attacked McCain in Thursday's acceptance speech, accusing him of following the policies of George Bush, the incumbent president.

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