The latest political crisis to plague the Toledo administration was sparked by the submission of Carlos Ferrero’s “irrevocable resignation as president of the council of ministers”, which came just minutes after the swearing-in of a new foreign minister, according to an official statement.
“I’ve asked the entire cabinet to put their offices at my disposal,” President Toledo said in a brief televised statement.
He said he would decide in the coming days which ministers would be kept on.
Fernando Olivera, a controversial figure known for his abrasive manner, heads the minority Independent Moralising Front (IMF) party which has formed a coalition with the president’s Peru Possible party.
“I don’t know how someone who behaves like that can be foreign minister,” Doris Sanchez, a Peru Possible MP, was quoted by the Reuters news service as saying, signalling a fresh rift inside the party.
Carlos Bruce, the government’s longest-serving and most popular minister, joined Mr Ferrero in handing in a protest resignation over the appointment.
Both men had argued with Mr Olivera in recent days over his support for expanding the nation’s legalised coca leaf production.
Mr Olivera had come out in favour of a push by regional governors in Cuzco to allow coca plantations in new areas.
His critics fear that increased production of the crop, legally grown for traditional medicines and tea, could boost the illicit trade in cocaine.
President Toledo appears set to ride out a rocky final 11 months in office, until elections in April next year and the change of office due for July.
His approval rating stands at just 14 percent and could suffer a further battering from this latest crisis.
Since coming to power in 2001, the Toledo government has been repeatedly beset by angry street protests from activists demanding the state retain control of power plants.