In a statement, Mr Fillon spelled out his priorities as head of the new government.

Francois Fillon's popularity ratings regularly exceed those of the president
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Sarkozy success - but at what cost?
French President Nicolas Sarkozy has replaced his foreign and defence ministers as part of a significant cabinet reshuffle.

Michele Alliot-Marie replaces Bernard Kouchner as foreign minister, while Alain Juppe becomes defence minister in place of Herve Morin.

Earlier on Sunday, Mr Sarkozy reappointed Francois Fillon as prime minister.

Most of the other big figures from the outgoing government remain in place.

Christine Lagarde will remain as economy minister, while Brice Hortefeux is staying on as interior minister.

Mr Juppe is a former prime minister, while Ms Alliot-Marie was justice minister.

Mounting tension
With his popularity at rock bottom, President Nicolas Sarkozy could have seen the reshuffle as a moment for a change of direction, says the BBC's Hugh Schofield. Instead, the president has calculated that it is in sticking to the course that lie his best hopes for re-election in 2012.

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Analysis

Christian Fraser
BBC News, Paris
Three weeks ago, they were bidding farewell to Francois Fillon. There was speculation he would be replaced by his energy minister, Jean-Louis Borloo. But this prime minister is more popular than the president - and particularly popular within the ruling party. Some say Mr Fillon's reappointment further undermines the president's power and credibility.

On top of that, the man he has tried to keep on-side - Mr Borloo, a centrist politician who has better relations with the unions - has now walked away, turning down a key post offered in compensation.

The main casualty was the foreign minster Bernard Kouchner, who has been a vocal critic of the president's treatment of the Roma. He is replaced by the former justice minister, Michele Alliot-Marie.

All in all, it looks like a no-risk reshuffle. In fact, after eight months of speculation - and the thinly-veiled attempt to get rid of the prime minister - the way it has been handled might do the president more harm than good.

The moves come a day after the entire government handed in its resignation.

There has been mounting political tension in France in recent months.

Last month, parliament passed controversial reforms to the country's pension system which sparked widespread protests.

The incoming government will be in charge of implementing policy in the run-up to the next presidential elections in 2012.

The outgoing foreign minister, Mr Kouchner, a socialist, had recently expressed unease at some government policies.

There had been speculation Energy Minister Jean-Louis Borloo could become PM, but he has no position in the new government.

In a statement, Mr Fillon spelled out his priorities as head of the new government.

"After three and a half years of brave reforms, carried out despite a severe global economic and financial crisis, I am starting... a new phase with determination which will allow our country to strengthen the growth of the economy to help jobs, promote solidarity and safeguard the security of all French people," he said.

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