French Cabinet Reshuffle

The main winner of the reshuffle is Jean-Louis Borloo, moved from the finance ministry to become head of an environment super-ministry, after Alain Juppe resigned from the cabinet when he failed to win a seat in Sunday's parliamentary vote.

Former agriculture minister Christine Lagarde becomes the first woman to head the economy and finance ministry. Her appointment will see her play a key role in shaping Sarkozy's ambitious and controversial reforms -- and puts the number of women in the cabinet at a total of seven. Other women appointed include Interior Minister Michele Alliot-Marie, Culture Minister Christine Albanel and Higher Education Minister Valerie Pecresse.

As Justice Minister, Sarkozy's campaign spokeswomen Rachida Dati becomes the first ethnic minority figure in a senior cabinet post.

In further surprise moves, Sarkozy added half a dozen junior ministers to the government, some of them also hailing from ethnic minorities and the left in line with his declared policy of "openness."

Muslim feminist, Fadela Amara, became junior minister for urban affairs, and a Senegalese-born woman Rama Yade, 30, a junior minister for foreign affairs and human rights.

Former foreign minister Michel Barnier took over from Lagarde as agriculture minister, while Socialist senator Jean-Marie Bockel was named junior minister for foreign assistance and francophony, bringing to three the number of leftists in foreign affairs.

Defying expectations

Sarkozy scored a political coup when he appointed prominent Socialist Bernard Kouchner, the founder of Doctors Without Borders, as foreign minister last month, confounding critics who had warned that he would concentrate power in a rightwing clique.

Most of the 15 senior ministers appointed last month after Sarkozy defeated Socialist Segolene Royal in the presidential election remained in their posts.

Sarkozy also named France rugby coach Bernard Laporte as sports minister, a post he will take up later this year following the World Cup, saying his priority was to win the event.

Overall, cabinet positions were halved, while portfolios expanded. Slimming down the cabinet is part of Sarkozy's agenda to cut costs and increase government efficiency.

Sweeping reforms

A special session of the newly-elected National Assembly is to be convened next week to push through a first round of reforms, including tax breaks aimed at jump-starting the economy and lowering unemployment hovering at 8.2 percent, one of the highest in Europe.

One month after Sarkozy took office promising sweeping reforms, his UMP party won a National Assembly majority in Sunday's vote, but it lost more than 40 seats while the opposition Socialists made surprise gains.

And in a symbolic blow to the government, Juppe, a former prime minister and mayor of Bordeaux, lost to a Socialist and had to resign from the cabinet.

Sarkozy had brought him back from political exile after his conviction in a party finance scandal that had prevented him from holding public office for a year.

Despite the disappointment, Prime Minister Francois Fillon has insisted that the election delivered a "majority for action" and vowed to forge ahead with the reform programm.

Fillon said Tuesday that he had not "shut the door" on a proposal to increase the value-added tax by up to 5 percent to help finance soaring health care costs.

The proposal was widely seen as having provided the opposition Socialists with a boon during the final days of campaigning for the parliamentary elections.

Royal split

Many in the party were angered by Segolene Royal's announcement Sunday that she had split from her long-standing partner, Socialist Party leader Francois Hollande. The French media has suggested that their troubled relationship undermined the party's campaign, and speculation is now rife that Royal is keen to take over from Hollande as Socialist leader.