Peru's Prime Minister resigns in protest over coca production

The resignation prompted Mr Toledo to ask all of his ministers to submit resignations, as required by Peru's constitution when the cabinet chief quits. "[I] will evaluate those who will continue on and those who will not," Mr Toledo said in a nationally broadcast address.

The latest crisis to hit Mr Toledo's government came minutes after the swearing-in of Fernando Olivera, Peru's ambassador to Spain, to replace the Foreign Minister Manuel Rodriguez, who resigned for "personal reasons".

Mr Ferrero almost immediately announced his "irrevocable resignation". He offered no reason, but the decision was widely seen as a response to the appointment of Mr Olivera, who last week clashed openly with several of Mr Toledo's ministers over his support for legalising expanded cultivation of coca - the raw material for cocaine.

Changes in the cabinet are frequent in Peru - Mr Ferrero was Toledo's fourth cabinet chief in four years - and the President is not obliged to accept all the resignations, said Abraham Siles, a constitutional expert.

"But ... these ministerial changes constitute an emergency because undoubtedly they have to do with power struggles over what tendencies will predominate in the circles of high government," he said.

Many of the ministers in Mr Toledo's 16-member cabinet would have had to resign in a few weeks anyway if they wished to run in national elections next April, he said in his address. "This will permit us to have a cabinet that will carry us to the end," said Mr Toledo, who has 11 months left to finish his five-year term.

Mr Olivera is leader of the Independent Moralising Front party, which has provided vital support to Mr Toledo in Congress, where his political party lacks a majority.

Peru permits limited cultivation of coca for chewing and for sale to companies that produce pharmaceutical cocaine, package coca tea or produce extracts used in soft drinks.

Soon after Mr Ferrero quit, the Housing Minister, Carlos Bruce, one of the country's most popular political figures, also issued a statement announcing his "irrevocable resignation".