Washington ? His hopes for the presidency dashed yet again, John McCain returns to the Senate as the Republican iconoclast his GOP colleagues find hard to embrace and one his Democratic peers would love to win over.

Hard feelings aside, the four-term Arizona senator still stands as an effective lawmaker – and critical vote – whom both parties will pursue.

McCain headed a GOP ticket that suffered significant down-ballot defeats in both the Senate and House. Shaken Republicans facing a bigger Democratic majority are welcoming McCain with what passes for warmth, collegiality and compliments.

“I think it is indisputable that he is our best-known and most prominent senator,” Senate Minority Leader Mitch McConnell of Kentucky said in a telephone interview last week.

Pointing out that a newsmagazine had named McCain one of the Senate’s top 10 most effective senators, McConnell added: “He is a very, very capable legislator and you really can’t say that about everybody in the Senate.”

Republicans need McCain or any senator who might join them during fights to keep a stronger Democratic majority from rounding up the votes to shut down GOP filibusters.

Democrats will control the White House and Congress for the first time in 14 years. But they need McCain, too, for the compromises he might help forge on the economy, immigration and Iraq.

That may make McCain’s support among the Senate’s most sought-after.

“He can pretty much write his own ticket,” said Sen. Arlen Specter, R-Pa., who plays a similarly independent role in Senate matters. “I don’t know that we have a titular head of the party, but … he is, in a sense, the standard-bearer of the party.”

Added Sen. Sam Brownback, R-Kan.: “I think his credibility and stature has grown.”

Grudges about McCain’s loss to Obama, amid the severe economic downturn, are not likely, Brownback predicted. “I think everybody looks at that and says, ‘I’m not sure anybody could have made it through that.”‘

But senators from both parties say McCain has work to do to repair relations with Republicans and build trust among Democrats and the incoming administration.

In the past week, McCain has sent several signals that he intends to do that as he mends and seals his political legacy in what could be the last two years of his congressional career.

In a gesture of fealty to his own party, McCain came out of his postelection respite to campaign for GOP Sen. Saxby Chambliss in Georgia’s Dec. 2 runoff. During his visit, McCain urged Georgia voters to back Chambliss, warning that Democrats will increase taxes and cut defense spending and the GOP needs to strengthen its ranks.

And he’s also working with the Democrats. He agreed to meet with Obama on Monday to forge a working relationship.

McCain refused an interview request for this report. But he authorized a spokeswoman to describe his intent to work well with others.

“He is eager to work across the aisle with colleagues on both sides and doing what he can to improve the country’s economic security,” said spokeswoman Brooke Buchanan. In addition to the economy, she said his priorities include finding the way ahead in Iraq and Afghanistan.

Whether he has credibility even among Republicans may become clear during the coming week’s lame-duck session of Congress.

His most recent legislative work was not convincing.

McCain was unable to deliver enough GOP votes to pass the first version of the $700 billion economic bailout plan, for which he briefly suspended his presidential campaign. A second version later passed and McCain voted for it. But unlike Obama, McCain did not speak in its favor in the Senate – a move said to disappoint some GOP leaders.

But McCain’s legislative work throughout 26 years in the Senate wins high praise even from colleagues who have firsthand experience with his temper. Many predicted he would use his talent and his position as the top Republican on the Senate Armed Services Committee to help Obama and Democrats develop an exit strategy for most U.S. forces in Iraq.