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, August 1, according to AFP.

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, 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, the report said.

Last week President Mohamed Morsi chose Qandil, 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 in June, 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.

Secular allies of Morsi during the election have opposed his appointment of Qandil, also said to be an Islamist, and warned against a cabinet dominated by Islamists.

Two of men whose appointments have been publicised -- Education Minister Mostafa Mosad and Housing Minister Tareq Wafiq -- belong to the Muslim Brotherhood's Freedom and Justice Party, a party spokesman told AFP.

The new government will take office amid a power struggle between Morsi and the military, which aside from its legislative powers has the right to veto any articles in the draft of a new constitution.

The military, which ruled Egypt between Mubarak's overthrow in February 2011 and Morsi's inauguration on June 30, will hold on to its powers until a new parliament is elected, possibly by the end of the year.