KIEV — Ukraine's new President Viktor Yanukovych on Thursday tightened his grip on power as one of his closest allies became prime minister and his party formed a government coalition.

The new coalition replaces the outgoing government of his arch-rival Yulia Tymoshenko, who Yanukovych defeated in a February 7 presidential election, and means the new president now controls all Ukraine's man power centres.

The new parliamentary coalition nominated Mykola Azarov -- a dour ex-finance minister who was born in Russia and is seen as a steadfast Yanukovych ally -- as prime minister.

The nomination was predictably approved by Yanukovych and then confirmed by parliament in a vote greeted by noisy cheers. Yanukovych embraced his new prime minister and handed him a bouquet of red flowers.

Resident in Ukraine since only 1984, the Russian-speaking Azarov has been mocked by Yanukovych's foes for his non-existent Ukrainian language skills and his undiplomatic talk.

Ukraine's new cabinet

But he is also seen as a solid economic manager and served as finance minister when Yanukovych held the post of prime minister and was also in charge of his election campaign.

Yanukovych's Regions Party formed a ruling coalition with two minority parties and also won over sufficient other deputies to form a majority.

Prime Minister Vladimir Putin of Russia swiftly congratulated Azarov, saying he expected to work closely with him to strengthen relations that plummeted to an all time low under President Viktor Yushchenko.

Addressing parliament, Azarov vowed to pursue structural reforms and stabilise Ukraine's economy, which was knocked hard by the economic crisis and contracted some 15 percent in 2009.

Turning on the former government, he said: "The country has been pillaged, the treasury is empty and the economic recession is continuing."

Speaking at a news conference afterwards, Tymoshenko spat back that she was handing the new government "a country which does not have a single kopeck of social debts."

Parliament speaker Volodymyr Lytvyn announced the creation of the so-called "stability and reform" coalition, saying it had a majority of 235 MPs in the 450-seat Verkhovna Rada assembly.

Besides the Regions Party, the coalition includes the Communists and Lytvyn's own bloc.

The third-place candidate in the presidential election, businessman Sergiy Tigipko, has been named deputy prime minister in charge of economic policy.

In a surprise appointment, Ukraine's ambassador to Russia, Kostiantyn Gryshchenko, seen as a pro-Western figure, was named foreign minister.

Although Tymoshenko has refused to recognise Yanukovych's legitimacy, she appears to be positioning herself as a strong opposition leader against what she describes as the president's "anti-Ukrainian" policies.

The formation of a new government had been eased by a bill passed by parliament this week allowing potential coalitions to recruit deputies as individuals rather than in parliamentary blocs.

This allowed the Regions Party-led coalition to recruit deputies from the Our Ukraine-People's Self Defence bloc, a minority faction split between those who want to back Yanukovych and those loyal to Tymoshenko.

The law formally took effect Thursday.

Long seen as a pro-Russia figure, Yanukovych has sought to shake off his image as a Kremlin stooge. This week he raised eyebrows in Russia by saying he would no longer seek to promote Russian to a state language in Ukraine.

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