The presidential palace made the announcement in a statement late on Friday.

Toledo, who had been expected to reshuffle his cabinet in the next few days, has been at odds with Merino over who to name as ministers.

Merino, who is visiting the United States, has faced a wave of anonymous attacks in local media over the past two weeks, accusing her of everything from corruption to lesbianism.

"In light of recent political events ... President Alejandro Toledo has asked for the resignation of the president of the council of ministers and all the ministers of the state," the palace said in a statement.

"In the same way, he has asked for the resignation of all presidential advisors," it added.

Toledo also asked for the resignation of all of his advisers, many of whom have been harshly criticized in the news media and even by members of his own party, Peru Posible.

The sacking of the adviser was largely anticipated as Peruvian Vice President David Waisman has repeatedly said in recent days that some errors committed by the government were due to poor advice given to Toledo.

Rumours

The scandal was triggered last month by a rumour alleging that Merino was a lesbian. Peru is a predominantly Catholic country where homosexuality is frowned upon.

Merino, who has an approval rating of between 60% and 65%, responded by telling reporters that she was a victim of a smear campaign orchestrated by a former prime minister and now a leading legislator, Luis Solari.

Toledo's foreign trade minister quit after an influence peddling scandal, his foreign minister was offered a job in an international body and the defence minister said he was leaving because he was "fed up".

She insisted the whispering campaign, launched "by dark forces," was aimed at thwarting needed economic reforms that she had proposed.

Merino is seen as a possible presidential candidate for the 2006 election.

The palace statement said a new cabinet would be sworn in on Merino's return to Lima on Monday.
 
Peru's ministers traditionally tender their resignation in December, but this year's reshuffle has become crucial after several portfolios became vacant in November.

Toledo's foreign trade minister quit after an influence peddling scandal, his foreign minister was offered a job in an international body and the defence minister said he was leaving because he was "fed up".

The reshuffle comes as polls show 80% of Peruvians are disillusioned with Toledo, criticising his record on creating jobs and fighting poverty.