State television and radio in military-run Myanmar announced Tuesday that Prime Minister Khin Nyunt had retired for health reasons and been replaced by Lieutenant General Soe Win.

The government of neighbouring Thailand announced earlier that Khin Nyunt, a general who was number three in the junta, had been sacked and was under house arrest for alleged corruption.

Soe Win is secretary of the junta, known as the State Peace and Development Council.

He is seen as a loyalist of the head of the regime, Than Shwe, and his promotion is likely to be interpreted as a strengthening of the position of military hardliners within the Myanmar leadership.

The announcement came after a day of speculation and rumour over a shake-up in the top tanks of the Myanmar political leadership.

Khin Nyunt, 65, was the face of the hardline regime overseas and supported dialogue with the detained opposition leader Aung San Suu Kyi.

Senior General Than Shwe strongly opposes allowing Aung San Suu Kyi any role in the political process.

Analysts saw Khin Nyunt’s arrest as a consolidation of Than Shwe’s power and said it was likely to signal a continued hard line against supporters of Aung San Suu Kyi, who has now been detained for 16 months — her third period of house arrest.

The sacking was also the culmination of growing tensions between rival factions within the leadership, sources in Myanmar said.

An analyst in Yangon said the sacking was likely to have major repercussions and followed feuding between military intelligence, headed by Khin Nyunt for 20 years, and the main body of the military leadership.