Germany's Chancellor Angela Merkel was named yesterday as the world's most powerful woman, for the third year in succession, by the US magazine Forbes - although the accolade was largely ignored by her home nation, which already refers to her as "Mrs World".

Forbes praised the conservative leader for the way she "bulldozes through controversy: hosted the Dalai Lama, chastised Mugabe and wants to make the euro a bigger player in global financial markets as the dollar wanes." It also lauded her for her commitment to the environment in advocating steep cuts in greenhouse gas emissions.

Ms Merkel came out ahead of Sheila Bair, head of the US Federal Deposit Insurance Corporation, which has been grappling with the global ructions triggered by America's subprime mortgage crisis. Indra K. Nooyi, the chief executive of PepsiCo, came third. Condoleezza Rice, the outgoing US Secretary of State, dropped down the rankings from 4th to 7th.

Forbes gave Ms Merkel credit for reforms in Germany which the magazine said had cut the country's previous record post-war unemployment and led to an economic upturn. Yet it failed to mention that the reforms were introduced by Gerhard Schröder, her predecessor. Indeed, some outsiders have argued that Ms Merkel's unwieldy grand coalition government of conservatives and Social Democrats has forced her to make a string of compromises that have rolled back economic reform, not advanced it.

Ms Merkel's green credentials are dulled by a German car industry committed to the manufacture of gas-guzzling vehicles and opposed to speed limits on the country's autobahns. Also on the downside, her government has been criticised by its Nato allies for failing to send troops to fight the Taliban in southern Afghanistan.

There is little doubt that her successes as an international mediator and her outspokenness on human rights issues are the main reasons for her record popularity in Germany, where an opinion poll last month found that 62 per cent of voters thought that she was doing a good job.

Initially dismissed as a dowdy east German with no dress sense who was incapable of making an effective political speech, Ms Merkel has gone from strength to strength since being elected in 2005. Her straightforward style has won her a reputation as a powerful negotiator. Within the EU, she has brokered important solutions over financing, carbon emissions and the controversial European constitution.

She rebuilt Germany's badly damaged relationship with the United States, which she inherited from Mr Schröder after his opposition to the Iraq war. Unlike her predecessor, she has also taken a tougher stand with Russia and China on human rights.

Ms Merkel has taken the credit for negotiating global carbon emissions targets ratified at this year's G8 summit in Japan. In Germany, the conservative press refers to her as the Queen of the EU.

And her record popularity suggests that she will win next year's German general election hands down. Her personal standing is not matched by that of her party, however, which currently has the support of just 37 per cent of the electorate.

The Forbes Top 10

1. Angela Merkel

Germany's first woman Chancellor, head of Europe's biggest economy and the country's most popular post-war leader on record

2. Sheila C Bair

Chairman of the Federal Deposit Insurance Corporation, hit badly by US sub-prime crisis.

3. Indra K Nooyi

The highest-ranked business woman on the list, as chairman and CEO of PepsiCo.

4. Angela Braly

CEO and president of WellPoint, the largest health insurance company in the US.

5. Cynthia Carroll

The first woman to head Anglo American, the world's largest producer of platinum.

6. Irene B. Rosenfeld

Chief executive of Kraft Foods, the company that brought the world Oreo cookies and currently the largest food and beverage maker in the US.

7. Condoleezza Rice

President George Bush's right-hand woman, a trusted member of his staff who served first as his national security adviser, and since 2005 as the US Secretary of State.

8. Ho Ching

The wife of Singapore's Prime Minister Lee Hsien Loong , and CEO of finance firm Temasek Holdings.

9. Anne Lauvergeon

Nicknamed "Atomic Annie", the CEO of French energy firm Areva is one of nuclear power's most vocal advocates.

10. Anne Mulcahy

Chairman of Xerox and the woman credited with having saved the iconic brand from bankruptcy.