Hi R and Bets. My guess is that if it's true that a senior monk will be chosen that it will effectively be so that he can act as a 'regent' while the real candidate is secretly identified by the usual means and got out of Tibet and the reach of political interference. So that he can be brought up in the right environment. (it's possible too that he could be reborn outside of Tibet, there have already been reported some examples of Rinpoches where this has happened)
It seems very unlikely to me that Tibetan Buddhism would set aside the long standing process of identification of reincarnations by signs - it's the central to the validity of the whole Rinpoche system on which Tibetan Buddhism is based.
This whole problem has arisen as a result of the complications surrounding the 'two Karmapa' affair. Info here on both who the Karmapa is (the reincarnating head of one of the major schools, longer established than the Dalai Lama) and on the controversy is you follow the link:
http://en.wikipedia.org/wiki/KarmapaThe risk I guess might be that even if this is done and the Chinese can swing it that they might arrange for some senior Rinpoches they can squeeze to identify a competing new Dalai Lama in circumstances that suit them.
This is what has been said of one of the two Karmapas, although in truth it's hard to tell exactly what is going down in that both seem to have 100% genuine supporters. Perhaps the game is rather than the more obvious one of getting 'their man' in to split Tibetan Buddhism.
Or perhaps the energy that is Karmapa has decided that it's in the interest of the greater good time to further break up the monolith that was Tibetan Buddhism....