MALAYSIAN Prime Minister Abdullah Ahmad Badawi, fresh from an overwhelming mandate in general elections, will overhaul his cabinet and restructure the finance ministry this week, government sources said on Tuesday.

Abdullah is expected to retain the finance minister?s post himself. However, as much as one-third of the cabinet could be new, the sources said.

Abdullah made slight changes in January to the cabinet he inherited from his predecessor, Mahathir Mohamad, who retired last October after 22 years in charge.

But, armed with the landslide win in last Sunday?s election, Abdullah is likely to bring in major changes.

?There?s going to be quite a lot of changes. There will be a restructuring of the cabinet, with new positions created to take account of the new agenda,? one well-placed source told Reuters.

?Something like 30 to 40 percent of the cabinet will be new.?

Abdullah is expected to stay out of the public eye until Thursday as he finalises his choices, but on Friday he is expected to name the chief ministers of Malaysia?s states.

Plans are for the cabinet to be finalised next Monday and sworn in on Tuesday.

Twelve of the country?s 13 states were won by the multi-racial Barisan Nasional coalition, while the alliance took more than 90 percent of seats in parliament, giving Abdullah the endorsement he needed for his anti-corruption campaign and stand for better governance.

?He didn?t have the mandate before. But he does now,? said an insider in the leadership.

?For the next six months to a year he can do whatever he wants, drop anyone he wants ? the mandate is entirely his. If he doesn?t do it, people will wonder.?

Division of duties at Finance

The sources outlined several changes to key positions.

The Finance Ministry was likely to be split with Mustapa Mohamed, head of the National Economic Action Council (NEAC), given additional charge of the powerful Economic Planning Unit.

The EPU is in charge of privatisation and the award of projects while the NEAC guides economic policy.

Nor Mohamed Yakcop was likely to be retained as Second Finance Minister, overseeing the Treasury and its investment arm Khazanah Nasional and the Employees Provident Fund.

Abdullah chose Nor Mohamed as his right hand man in finance last January.

Nor Mohamed, an ex-central banker, was Mahathir?s economic adviser, helping him switch the ringgit to a fixed exchange rate regime in 1998 to ward off the Asian currency crisis.

Awang Adek Hussin, another ex-central banker and current chairman of Tenaga Nasional Bhd, could be brought in as Deputy Minister of Finance. Alternatively, he could be given the domestic trade portfolio -- a move that would mean the end of Jamaludin Jarjis?s cabinet career.

JJ, as he is known, was Second Finance Minister in Mahathir?s final year. If he is removed, it would be seen as evidence of Abdullah following through after demoting Jamaludin to domestic trade and consumer affairs.

Another likely casualty from Abdullah?s win could be Entrepreneur Development Minister Mohamed Nazri Abdul Aziz, who was recently beset by a scandal over the award of taxi licences.

Abdullah is expected to wield the axe on others too, though several old timers from Mahathir?s cabinets are retiring.

Najib Razak will remain Deputy Prime Minister for sure after being appointed by Abdullah in January. Najib is likely to keep the defence portfolio or could be named Minister of Home Affairs (Interior Minister), a post currently held by Abdullah.

Najib?s cousin, Hishamuddin Hussein, the sports minister who heads the youth wing of Abdullah?s United Malays National Organisation, is a possible candidate for Defence, or may be put in charge of a public enterprise.

Hishamuddin, whose father was the country?s third prime minister Hussein Onn, has a clean reputation and would be in the vanguard of the new generation that the 64-year-old Abdullah is seeking to bring through.

Rafidah Aziz, the feisty veteran of Mahathir?s cabinets and one of the longest serving trade ministers attending World Trade Organisation negotiations, is seen keeping her portfolio. The current Energy, Communications & Multimedia portfolio held by the retiring Leo Moggie will be split into separate ministries. Other ministries also could be broken up, partly reflecting the expanded parliament, the sources said.

Simon Cameron-Moore