Alistair Darling, 53, succeeds Brown as chancellor of the exchequer, while David Miliband, 41, replaces Margaret Beckett as foreign secretary. He is the youngest person to hold the post since David Owen in 1977.

The former environment secretary, tipped as a future Labour Party leader, said he was "tremendously honoured and absolutely delighted" to be appointed and pledged to bring leadership and be "patient as well as purposeful".

The announcements came less than 24 hours after Brown replaced Tony Blair as prime minister and both Darling and Miliband's appointments had been widely expected.

Brown also appointed Jacqui Smith, 44, to the post of home secretary following John Reid's departure.

Known for her unswerving loyalty to the party, she is the first woman to hold the position and was one of the 101 original "Blair babes" elected to parliament in 1997 when Blair became prime minister.

There was also a return to high office for Blair's former home and foreign secretary Jack Straw. He was appointed justice secretary, while Des Browne was re-appointed as Defence Secretary.

But as Brown spent his first full day in the job, Blair dominated the headlines following the announcement of his appointment as an international envoy to the Middle East soon after his formal resignation Wednesday.

In his first detailed comments on his new role, which he said he will start immediately, Blair said it was "a huge challenge".

"I have to prepare the ground for a negotiated settlement, and the key to that is to prepare the Palestinians for statehood," he told the Northern Echo in an interview published Thursday. "It is a fundamental issue."