Who's Obama going to call when he wants to talk to Europe?

In a humiliating blow to the European Union's new leadership, US President Barack Obama has backed out of an EU summit, drawing attention to a messy power struggle on the Continent.

It was hoped that the May summit would help to bolster the inaugural EU President's standing – and by extension Europe's – on the world stage. But Mr Obama's cancellation, ostensibly due to an overloaded domestic agenda, has torpedoed that aim.

And yesterday summit host Spain said it would most likely postpone the annual gathering following Washington's snub.

"Obama turns his back on Europe," declared El Pais, Spain's leading newspaper, echoing widespread unease over the perceived snub. Some diplomats blamed the Spanish Prime Minister, Jose Luis Zapatero, for his insistence on holding the meeting in Madrid instead of at the EU headquarters in Brussels. Spain holds the rotating EU presidency and has mapped out a summit-laden programme for its six-month term, instead of graciously relinquishing power to the office of the new EU President, Herman van Rompuy.

His post was created at the end of last year with the conclusion of the Lisbon Treaty, a long and tortuous project intended to simplify power structures and decision-making within the 27- member bloc. Instead, both sides now appear to be vying for attention.

"If it had been in Brussels, Obama could at least have combined it with a visit to Nato's headquarters down the road. But Spain was determined that it should bask in Obama's limelight," said one EU diplomat. "Washington probably doesn't have time to be caught up in this tug-of-war." Recent press conferences have starred Mr Zapatero, Mr van Rompuy and European Commission President Jose Manuel Barroso on one podium – a trio dubbed "The Three Sages" – or, less charitably, "The Three Idiots".

"It's all quite turbulent right now. It looks very clumsy and unrehearsed to have all these figureheads around," said Andrew Duff, a British Liberal and member of the European Parliament. "But then again, it was always going to take time for the EU to settle into its new regime."

New EU foreign policy chief, Catherine Ashton, had signalled the importance that Europe attaches to strengthening ties with the United States during talks in Washington last month. Yesterday US administration officials were trying to smooth ruffled feathers after Mr Obama's cancellation late on Monday night.

The Secretary of State for Europe, Phillip Gordon, told reporters that Mr Obama "has a very full agenda this year and this limits the amount he can travel" but that Washington "remains deeply committed to the EU".

Yesterday some observers said Spain's possible postponement of the summit should be a warning to Europe about its obsession with gatherings. "Obama's move is a signal to Europe that this was one summit too many," said Antonio Missiroli, director of the European Policy Centre, a think-tank in Brussels.

"There was nothing of substance on the agenda, the EU just wanted to hold it for the sake of it. Mr Obama has better things to do. He needs to send a signal to the US public that he will not be easily distracted away from his main concern, the economy."

The EU finds itself trapped in a power vacuum. The new European Commission team has been delayed for months and the new High Representative, Baroness Ashton, is far from having her new global diplomatic service in place. In her early steps on the global stage she is largely judged to have missed her footing. She came under fire for not going to Haiti after the earthquake, and is criticised for deferring too often to EU states' foreign ministers.

Tomorrow, Mr Zapatero will perhaps be reassured about the importance of European relations when he and Mr Obama attend the National Prayer Breakfast in Washington.

And the hope in Brussels is that life will become easier once Belgium takes over the rotating presidency from July. All summits will then be held in Belgium and mostly hosted by Mr van Rompuy, who is himself a Belgian.