CAIRO: Egypt's Prime Minister Hisham Qandil has selected a new government in which the finance and foreign ministers from the outgoing cabinet will retain their posts, state television reported on Wednesday.

Qandil was meeting with the ministers, including Foreign Minister Mohammed Kamel Amr and Finance Minister Mumtaz al-Said, a day before he was to formally unveil the cabinet on Thursday, the Nile News channel reported.

A military official told AFP that army commander Field Marshal Hussein Tantawi, who served as Hosni Mubarak's defence minister and then ruled the country after the dictator's overthrow, will be defence minister.

The premier selected Ahmed Gamal al-Din, a former deputy interior minister, as his new interior minister, state television reported.

Last week President Mohamed Morsi chose Qandil, the irrigation minister in the outgoing cabinet, to select a new cabinet that would carry out an ambitious plan to quickly restore security and improve the economy.

The military, which retains legislative powers after a court disbanded the Islamist-dominated parliament last month, just before Morsi took office, retains control of the budget in line with the country's interim constitution.

It was also expected to have a say in the appointment of the foreign minister and finance minister, whose budget was fiercely opposed by the parliament dominated by Morsi's Muslim Brotherhood.

Qandil had said he wanted a government of technocrats selected on the basis of their competence.