Ecuador's new president has begun making cabinet appointments designed to restore stability to the troubled country.

Gustavo Noboa has so far only named six junior members of his team, and observers are waiting to see who will be appointed to the key economic posts.

It was the state of Ecuador's recession-hit economy that prompted the street protests which culminated in President Jamil Mahuad being forced from office.

His policies included adopting the US dollar as the national currency - a scheme which Mr Noboa has already said he will pursue despite fierce opposition from the indigenous Indians who led the street protests.

Analysts say the success of the new government will depend on the regional balance of the cabinet and Mr Noboa's economic team.

'Betrayed by military'

Indian leaders were not in favour of Mr Noboa's appointment and they have threatened to oust him unless he solves the country's economic problems quickly.

The Confederation of Indigenous Nationalities said they were betrayed by the military, which first supported their call for a complete change of government but then decided to support Mr Noboa.

Their leader, Antonio Vargas, said Mr Noboa had only been installed because of pressure from Washington.

In recent months, Ecuador's recession-plagued economy has shrunk by 7%, while inflation has reached levels of between 60% and 80%.

Mr Mahuad's dollarisation plan was unpopular with the indigenous population and workers' unions, which said the scheme would further impoverish them by increasing prices but keeping salaries low.

Corridors of power

On Sunday, Mr Noboa entered the presidential palace for the first time since becoming leader.

As he stepped inside Carondelet Palace, in Quito, his only words to waiting journalists were: "Peace, progress, justice."

Just two days earlier, the palace had been the focal point of the campaign to oust Mr Mahuad.

Thousands of Indians converged on the building, calling for his resignation. Earlier, they had stormed parliament, demanding a new government.

Sections of the military supported the uprising and Mr Mahuad was forced to flee the palace under armed escort.

A three-man junta was set up to oversee the country, but within 24 hours it had been disbanded after Mr Noboa agreed to become president.

Mr Noboa arrived at the palace on Sunday with his wife Maria Baquerizo and a small group of close friends and advisers. It is unclear when he will be formally sworn in as president