East Timor's independence hero Xanana Gusmao was named prime minister yesterday, inciting fresh violence a year after clashes between security forces drew the tiny nation to the brink of civil war.

The country's largest party slammed the appointment, saying it had been denied the right to form the new government, and gangs of youths responded by setting tires on fire in the streets of the capital and torching a tax office.

East Timor won independence from Indonesian rule in 1999 in a UN sponsored referendum. Three years later, it became Asia's newest nation, but the euphoria was quickly replaced by the bitter reality of governing a divided and poverty-stricken nation.

Last year, a military mutiny sparked clashes between rival troops that quickly morphed into gang violence, arson and looting. More than 35 people were killed and some 150,000 others fled their homes before the collapse of the young government.

Presidential elections in May were won by Jose Ramos-Horta. But parliamentary polls the following month were inconclusive, with the Fretilin party winning 21 seats in the 65-member parliament, well short of a majority. Gusmao's party won 18, but with its coalition partners controls 37 seats, and argued they had the right to rule.

After appealing for the two blocks to form a national unity government, Ramos-Horta used his constitutional right to hand the prime ministerial post to Gusmao, a close political ally and the former head of state.

(China Daily via agencies August 7, 2007)