Toledo and Merino were reportedly at odds over ministerial posts

Carlos Ferrero - a parliamentarian from the president's party - succeeds Beatriz Merino, whom Mr Toledo asked to stand down last week.

She had enjoyed high approval ratings, despite a scandal involving allegations of lesbianism and corruption - which she denied.

Many regarded Ms Merino as a stabilising force in Mr Toledo's otherwise weak government.

The BBC's Hannah Hennessy in Lima says her replacement will have a lot of ground to make up.

Falling out

Mr Ferrero, 62, was congressional speaker from December 2000 until July.

Analysts say he is an experienced peacemaker who could build bridges with opposition parties.

Ms Merino was tax lawyer with a reputation for honesty and had the support of almost 60% of the population, according to a recent poll.

She is said to have fallen out with the president over cabinet appointments.

President Toledo's approval rating was only 11%, the poll also suggested.