Saudi Crown Prince Nayef to be buried on Sunday

RIYADH (Reuters) - Saudi Arabia's King Abdullah will bury his former heir, Crown Prince Nayef, in Mecca on Sunday, and must now name a new successor to rule the world's biggest oil exporter.

The most likely candidate to take the position to succeed the 89-year-old king is Prince Salman, 76, and like all former kings a son of Saudi Arabia's founder Abdulaziz ibn Saud.

"There will be a meeting where the next crown prince will be decided. If you take a historical perspective it has always been done in an orderly and organized manner. Prince Salman fits the profile in many ways," said Khaled Almaeena, editor in chief of the Saudi Gazette.

Salman, who is seen as a pragmatist with a strong grasp of the intricate balance of competing princely and clerical interests that dominate Saudi politics, was named defense minister last year.

The appointment of a new crown prince is not likely to change the kingdom's position on foreign or domestic policy, but King Abdullah's new heir will face a range of major challenges when he one day becomes king.

Saudi Arabia has a rapidly growing population and an economy that is heavily reliant on oil exports. It also faces a threat from al Qaeda and a regional rivalry with Iran.

"Certainly they are going to continue to focus on the relationship with the U.S., and continue to make efforts to properly husband their abundant natural resources of oil," said Robert Jordan, U.S. ambassador to Riyadh from 2001 to 2003.

Although most analysts believe it highly unlikely that Salman will not be chosen as crown prince, the ultimate decision may rest with a family Allegiance Council called in to approve King Abdullah's decision.

Unlike in European monarchies, the Saudi succession does not pass from father to eldest son, but has moved along a line of brothers born to Ibn Saud. A previous crown prince, Sultan, died last October.

A source close to the royal family said Nayef had died suddenly in Geneva after receiving treatment for a knee complaint. He was thought to be 78.

Analysts say the most difficult decision in the kingdom's succession will be when the line of Ibn Saud's sons is exhausted and a grandson must be chosen as crown prince.

"The house of Saud will need to think about what would happen in the event the king became unwell, and there is no way on earth you would hand the crown prince role to a grandson in 48 hours time. You have to find an older prince," said Michael Stephens, researcher at the Royal United Services Institute think-tank in Qatar.

(Reporting By Angus McDowall; Additional reporting by Isabel Coles in Dubai; Editing by Robin Pomeroy)