The Czech president Vaclav Havel has said he will appoint the head of the country's central bank as the new Prime Minister. The announcement ends over two weeks of uncertainty following the resignation of the last government, which was headed by Vaclav Klaus. As Ray Furlong reports from Prague, the new government is probably to have a temporary mandate until early elections next year:

At a tense news conference at Prague Castle, President Havel said one of the reasons for making Josef Tosovsky head of the government was that he enjoyed the support of all three parties which made up the former ruling coalition, as well as that of the main opposition Social Democrats. Mr Tosovsky, who is head of the Central Bank, is regarded as a hard-working and modest man who carefully avoids publicity.

The 47-year-old won the European Banker of the Year award in 1994 and 1995 and is also seen as the man who pushed most to make the Czech currency convertible. He is not a member of any party, but in his role as Central Bank chief has often clashed with the outgoing prime minister, Vaclav Klaus.

And Mr Klaus, who won re-election as leader of his Civic Democratic Party at the weekend, has given a lukewarm response to Mr Tosovsky's appointment. "We'll see what sort of programme he proposes," said Mr Klaus, suggesting that President Havel's optimism may not be entirely well-grounded.

But if Mr Klaus gave a guarded response, markets welcomed the news. The Czech currency rallied strongly and the stock exchange is also expected to strengthen.