Lee Myung-bak said he had selected Han Seung-soo, 72, to take the government's second-highest job and help boost economic growth - his central campaign pledge.

'I believe (Han) has a more global mind than anyone else,' Mr Lee said with Mr Han beside him at a news conference. 'With his international experience and contacts, he is the most competent person to revive the economy.'

Mr Han served as foreign minister in 2001-02, finance minister in 1996-97, a national legislator three times since the late 1980s and president of the UN General Assembly in 2001-02.

He was named a UN climate envoy last year by UN Secretary-General Ban Ki-moon, also a former South Korean foreign minister.

Major political parties have agreed to vote Feb 26 on Mr Han's nomination, a day after Mr Lee's inauguration.

Mr Han said on Monday he would engage in economic diplomacy as prime minister, with a focus on securing a stable supply of natural resources. Resource-poor South Korea imports almost all of its oil.

The post of prime minister in South Korea is largely ceremonial, but the officeholder heads the country if the president is incapacitated.

Mr Lee is expected to name other Cabinet officials in coming weeks.

However, the appointments could face difficulties because of his plan to scrap several ministries to streamline government.

A key issue is Mr Lee's plan to shut down the Unification Ministry, tasked with reconciliation with North Korea, and incorporate it into a renamed Foreign Ministry.

Mr Lee, a conservative who has vowed to take a harder line toward the North, has said the two ministries inconsistently handled North-South issues.

Over the past decade, liberal governments in South Korea have pursued a policy of engagement with communist North Korea despite conservative criticism at home and abroad that they were too soft on the North.

Liberal-leaning parties have said they will vote against the government reorganization plan, and outgoing President Roh Moo-hyun indicated he would veto the legislation if it passes the National Assembly while he is still in office.

'What is the logic behind the government restructuring plan? Is our government big?' Mr Roh said at a news conference on Monday. 'Respect my right not to sign things that run counter to my conscience.'

Mr Lee's Grand National Party later criticised Mr Roh for provoking a dispute with less than a month left in his term. -- AP