East Africa's most stable democracy was plunged into political crisis on Wednesday night when Kenya's President Mwai Kibaki sacked his entire Cabinet after suffering a defeat in a referendum on a new Constitution.

He said in a televised address: "I have sacked all ministers and assistant ministers with immediate effect. I will announce a new government before the end of two weeks."

Kibaki (74) suffered an embarrassing defeat on Monday when 57% of voters rejected a draft Constitution he had championed that allowed him to keep extensive powers. Voters refused to endorse this and called for a new Constitution to limit the Presidency's powers.

Kibaki said: "Following the results of the referendum, it has become necessary for me to reorganise my government to make it more cohesive and better able to serve the people of Kenya."

Seven out of 28 Cabinet ministers, including the Roads Minister, Raila Odinga, had rebelled against the president to lead the "no" campaign. During the campaign, Kibaki had threatened to sack his Cabinet opponents, but when he lost, analysts suggested he might take a more conciliatory stance. Wednesday night's purge and other recent statements suggest he is unwilling to compromise.

Campaigners for a "no" vote want to return to an earlier draft Constitution, known as the Bomas draft, but Kibaki has made no reference to this. He has said the existing Constitution will remain in force and has called on Kenyans to focus their energy on development.


KENYA'S FUTURE

A Western diplomat in Nairobi said Kenya's future rests on whether the president now reaches out to the "no" campaigners or falls back on the support of loyalists such as Transport Minister Chris Murungaru, who has been banned from entry to Britain over sleaze allegations, and his wife, Lucy Kibaki, whose erratic behaviour has provoked embarrassment.

The diplomat said: "On the positive side, Kibaki had to acknowledge that the people had spoken and that he is out of touch. He also had to acknowledge that his Cabinet could not work together. He's taken quick and decisive action.

"On the negative side, it's a period of complete uncertainty. We need to know -- is he going to go with the Murungaru and Lucy gang, or the reformers?"

Instead of being a beacon of progress for the region, Kenya now appears lost in internal dissent. The referendum vote highlighted tribal differences thought to have faded in recent years, and a government aimed at giving Kenya a fresh start after the corruption of the Daniel arap Moi era has fallen apart.

The "yes" campaign took 92% of the vote in the central region around Mount Kenya, the homeland of Kibaki's Kikuyu tribe, while the "no" vote drew staunch support in the region bordering Lake Victoria, home to the Luo ethnic group.

Some analysts suggest the referendum result was also a protest vote against Kibaki's patchy record in creating jobs.

Magesha Ngwiri, opinion editor of the Daily Nation newspaper, wrote on Wednesday that the vote was "a countrywide protest against the fact that he seems to have retreated into some laager of his own creation, surrounded by cronies who strove to offer him wrong advice at every turn".