By Thomas Escritt and Fatos Bytyci
AMSTERDAM/PRISTINA (Reuters) - Ramush Haradinaj, who helped lead a guerrilla insurgency in Kosovo in the late nineties and served briefly as prime minister, was acquitted of war crimes on Thursday for a second time, setting up a possible return to power but angering Serbia.
"I'm happy that international justice has confirmed that our road to freedom was clean and just," Haradinaj, 44, told reporters on his arrival in Kosovo, where he was met by Prime Minister Hashim Thaci and a military honor guard.
The verdict, in a retrial at a United Nations court in The Hague, was met with jubilation and fireworks in Kosovo, but condemned by Serbia as proof of the court's anti-Serb bias.
The fallout could yet test a new push by the European Union to reconcile Serbia and its former southern province almost five years after Kosovo declared independence with Western backing.
The verdict also dealt a fresh blow to U.N. prosecutors after the acquittal on appeal this month of Croatian general Ante Gotovina for crimes against Serbs during a 1995 military offensive.
Judges ruled that there was no evidence to support charges against Haradinaj of crimes against humanity during a 1998-99 war between guerrillas of the Kosovo Liberation Army (KLA) and security forces under late Serbian strongman Slobodan Milosevic.
Prosecutors had accused Haradinaj and two accomplices of persecuting ethnic Serbs in an effort to drive them out.
"On the contrary, the evidence establishes that, when he heard about the mistreatment of individuals, Haradinaj said no such thing should happen because this is damaging of our cause," said the presiding judge, Bakone Justice Moloto.
There were gasps and cheers in the courtroom.
In Belgrade, nationalist Serbian President Tomislav Nikolic said the U.N. tribunal for the former Yugoslavia was "formed to try the Serbian people" and warned of consequences for regional relations. "If someone wanted to set us against each other, they've found the right way," he said.
Speculation is rife in Kosovo that Thaci plans to reshuffle his coalition government to bring in Haradinaj's Alliance for the Future of Kosovo, possibly ceding the post of prime minister to Haradinaj and seeking the presidency for himself.
Haradinaj's lawyer said the former nightclub bouncer, "with the consent of the people, will soon be resuming his rightful position as the political leader of the country".
That could see him join EU-mediated talks between Pristina and Belgrade aimed at building relations between the two and cementing peace in the Balkans.
Progress is a key condition of Serbia's integration with the EU. Nikolic said the verdict would "annul" what had so far been achieved, but Ivica Dacic, who holds the more powerful post of prime minister in their ruling coalition, urged pragmatism.
"We can decide not to go to the next round of talks, but then we'll wait until 2014 to start (accession) negotiations with the EU," Dacic told reporters. "Let's look at what's in our best interest," he said.
Rights watchdog Amnesty International said an estimated 800 ethnic Serbs, Roma and other minorities in Kosovo had been allegedly abducted and murdered by the KLA.
"Is anybody ever going to be brought to justice?" said John Dalhuisen, Director of Amnesty's Europe and Central Asia program. "These are the questions that the victims and their families ask, and will continue to ask, until they see justice."
The prosecutors have complained of widespread witness intimidation in Kosovo, a country of 1.7 million people where the KLA is still revered and clan loyalties run deep. But diplomats say the evidence against Haradinaj was always thin.
Serbia's brutal counter-insurgency campaign, in which almost a million ethnic Albanians were expelled, was Milosevic's last throw of the dice after he fomented wars in Bosnia and Croatia during the collapse of federal Yugoslavia.
NATO intervened in 1999 with 78 days of air strikes to drive Serb forces from Kosovo, which became a ward of the United Nations. Milosevic was ousted in 2000 and died in 2006 in his cell in The Hague while on trial for war crimes.
Kosovo is still patrolled by about 6,000 NATO peacekeepers, policed by the European Union, and dogged by a de facto ethnic partition between the 90-percent Albanian majority and Serbs in the north who are supported by Belgrade.
Haradinaj was prime minister for several months in 2005 but resigned when he was first charged. He was acquitted in 2008 but appeal judges ordered a partial retrial, saying the prosecution should have been given more time to make its case.
(Additional reporting by Radosa Milutinovic in The Hague and Aleksandar Vasovic in Belgrade; Writing by Matt Robinson; Editing by Hugh Lawson)