By Tom Pfeiffer and Sherine El Madany

CAIRO (Reuters) - Egypt's presidential election, set to be the freest it has ever had, began for citizens abroad on Friday after a caustic televised debate between two candidates that produced no clear favorite to lead the most populous Arab nation.

Egyptians who overthrew President Hosni Mubarak as uprisings swept the Arab world last year are savoring the spectacle of politicians competing for their votes and the streets are abuzz with argument over who is the best man to tackle poverty and corruption and uphold their new-found freedoms.

With no obvious winner for now, the fewer than 1 million expatriates registered to vote in consulates between May 11 and 17 may help swing the election. Recent polls suggest the race is wide open, with many citizens yet to make up their minds.

Expatriates who have registered to vote are a minority among the 6 to 8 million Egyptians who live abroad, mostly in Europe, North America and Gulf Arab states, according to official figures cited by local media.

In Cairo's sheesha (water-pipe) cafes and on Twitter, Egyptians swapped impressions of Thursday night's unprecedented televised stand-off between Islamist Abdel Moneim Abol Fotouh and Amr Moussa, a former foreign minister of Mubarak.

"If you didn't enjoy the debate like me, remember that if someone told you a couple of years ago that there would be a presidential debate, you would have thought it was a sci-fi movie," tweeted Mohamed Diab.

The disorganized build-up to the first-round vote on May 23 and 24 has been marred by deadly street clashes in Cairo and lingering suspicions that the generals now in charge will try to manage democracy from behind the scenes after formally handing over to civilians by July 1.

UNCERTAIN TRANSITION

Egypt has never had a genuinely contested presidential election, but several candidates were disqualified last month and two recent court verdicts have challenged regulations for the vote, deepening the impression of a chaotic and fragile political transition towards a more democratic future.

A supreme administrative court is due on Saturday to view the state's appeal against one of the court rulings which demanded the postponement of the election.

Egypt's democratic experiment is being closely watched by long-time ally the United States and neighboring Israel, both unnerved by the sweeping success of Islamists who were long repressed by Mubarak but who now dominate parliament.

Liberal and left-wing activists who helped topple Mubarak have struggled to translate their success on the streets into a prominent role in politics. The presidential campaign is mostly a contest between Islamists and Mubarak-era figures.

Policy paralysis and political bickering has drained some of the optimism that greeted Mubarak's ousting in February 2011.

The Moussa-Abol Fotouh debate lasted more than four hours and may have entrenched the impression that they are the main contenders. The two independent TV stations that aired it said they had been invited because they topped recent opinion polls.

But many viewers complained of an irritable and negative tone in their exchanges that may hand votes to other candidates, such as the Muslim Brotherhood's Mohamed Mursi, Mubarak's last prime minister, Ahmed Shafiq, and leftist Hamdeen Sabahy.

"Moussa attacks but doesn't answer questions. He should have proven with examples that he wasn't part of the old regime," advertising company employee Mostafa Mohamed said at a cafe in the centre of the capital.

Mohammed Al-Ayouti said on Twitter: "Both candidates lost, but Abol Fotouh lost more than Amr Moussa."

Both bespectacled and dressed in suits and ties, Abol Fotouh and Moussa touched on taxation, police reform, education, the health care system and the role of the powerful military - which they both said should stay out of politics.

Moussa cast himself as the statesman Egypt needed to lead it through "a crisis of existence". Abol Fotouh said he was the man to unite the country and end "a state of polarization" between liberals, leftists and Islamist.

If no candidate wins more than 50 percent of the vote in the first round, a run-off between the two top-placed contenders will take place in June.

(Additional reporting by Tamim Elyan; Writing by Tom Pfeiffer; Editing by Alistair Lyon)