Foreign Secretary Avigdor Lieberman greets William Hague today in a more powerful position than ever

William Hague is entitled to a little more than the usual trepidation that afflicts every minister making a first visit as Foreign Secretary to the political minefield that is Israel and the occupied territories. For today, he comes face-to-face with his Israeli counterpart, Avigdor Lieberman, one of the most controversial politicians in the democratic world who also royally humiliated the last two European foreign ministers to pay him a visit.

British diplomats are hoping that Mr Hague will avoid the fate suffered last month by his French colleague, Bernard Kouchner, and the since-departed Spanish foreign minister, Miguel Moratinos. The two men woke up the morning after a dinner with Mr Lieberman to read in the Israeli press lurid accounts of their host's abrasive warning to them: "Solve the problems in Europe" before "teaching us to resolve conflicts here". It was not so much the exchange itself that infuriated the two ministers. It was the breach of every diplomatic convention Mr Lieberman performed by leaking details of what they had assumed was an entirely private meeting.

But then, "diplomatic" is hardly a word to describe Israel's Moldova-born foreign minister and leader of the hardline nationalist Yisrael Beiteinu party, a man who built his success in the 2009 election - an entry ticket to the governing coalition - with a draconian demand that Arab Israelis should lose their citizenship unless they pledge loyalty to the Jewish state.

A fortnight before embarrassing his French and Spanish guests, Mr Lieberman amazed the mainstream Israeli political establishment by using a speech at the United Nations in New York to defy Prime Minister Benjamin Netanyahu's public stance that a comprehensive agreement with the Palestinians is possible within a year.

Mr Lieberman suggested that even an "intermediate" deal could take a "few decades," and proceeded to reaffirm one of the most ethnically radioactive policies of his party: A redrawing of Israel's borders to allow "the static transfer" of about 100,000 Israeli Arabs in the northern Arab towns to a future Palestinian state "in return" for the main West Bank settlements remaining in Israel. Not only is this resolutely opposed by most Israeli Arabs, it is not yet government policy.

Even in a country inured to the normal bickering of a coalition government this was high heresy. "Lieberman is damaging Israel," says his (Labour) Cabinet colleague, the minister for minorities Avishai Braverman. "The foreign minister is a spokesman for the government and I don't know a country in the world where [he] speaks against government policy. He should not be in the government."

Yet the Prime Minister's office merely explained in low-key terms that the Lieberman speech had not been "co-ordinated" with his boss. Whether this was a result of Mr Netanyahu's fear of his foreign minister, a sense that he might be helpful in demonstrating to the US the Prime Minister's problems with his coalition, or merely a belief that it was not the time to confront the most unruly member of his inner cabinet, Western diplomats see it as testimony to Mr Lieberman's growing power. "Whatever you say about him," one said, "Lieberman is a player".

When Mr Lieberman, who lives in the Jewish West Bank settlement of Nokdim, was given his job by Mr Netanyahu, the move did not appear calculated to reassure Israel's allies that the country was serious about securing a lasting peace. Mr Lieberman has dismissed as a "provocation" claims that he was a youthful adherent of the outlawed and racist Kach party. And he has never, at least in theory, ruled out the possibility of an eventual two-state solution to the conflict - provided, clearly, that "static transfer" was part of the deal.

But this is also the man who had publicly suggested that Israel should do in Gaza what the Russians had done in Grozny, and that Arab members of the Israeli parliament, the Knesset, should be executed for meeting Hamas.

In a Yediot Ahronot newspaper poll last month, 60 per cent of Israeli voters put him top of a league table of politicians who are "most responsible for the increase in extreme nationalist and near fascist tendencies".

In a 2006 interview he clarified his priorities: "I very much favour democracy, but when there is a contradiction between democratic and Jewish values, the Jewish and Zionist values are more important."

Lieberman helped to extend his hard-right appeal beyond his party's natural base of immigrants from the former Soviet Union during last year's election with a spate of demagogic anti-Arab rhetoric. The much-criticised cabinet support for legislation requiring every newly naturalised citizen to pledge loyalty to Israel as a "Jewish state" is a first fruit. A bill that would for the first time allow smaller Jewish communities to bar anyone they regard as unsuitable from living in their midst, including Arabs, has just been a approved by a Knesset committee chaired by a member of Mr Lieberman's party.

He has largely stayed out of the halted peace talks, ceding to the defence minister, Ehud Barak, the job of dealing with the US and the Palestinians. But that suits him because it keeps his hands "clean" of negotiations in which he doesn't believe and because he regards the issue as one of Israel's security, not of Palestinian rights, making the defence ministry the appropriate department to handle it.

The foreign minister has scant contact with many of his senior career officials, with the exception of a couple of favourites, preferring to rely on his trusted personal aides for a big set piece like the UN speech. Paradoxically, he has secured the budget funds to re-open the embassy in New Zealand and establish a new consulate in Sao Paolo - a further sign of his clout, and one not so far undermined by the fact that he still faces possible indictment after a lengthy police investigation into allegations of corruption, which he adamantly denies.

He is also increasingly seen by as a leader-in-waiting of the right, a project that Mr Netanyahu fears could be advanced if he sacks his foreign minister to make way for the centrist Kadima politician, as he might well have to do if he is serious about a deal with the Palestinians.

That in turn poses the question of whether Mr Lieberman could ever become prime minister. Those reluctant to rule out the prospect point to the case of Ariel Sharon, once a hard-right politician beyond the pale for the international community and for many Israelis. Mr Sharon moved somewhat toward the centre with disengagement from Gaza. Whether Mr Lieberman would do the same is a moot point.

Mr Hague's meeting has at least an even chance of passing smoothly. While he will not at all like Mr Hague's planned meetings with Palestinian activists, one Israeli official points out: "Lieberman had a lot of form with Kouchner, he doesn't have any with Hague. And he can be charming if he chooses."