Britain's Brown rejigs cabinet to calm crisis

By Frank Prenesti and Luke Baker

LONDON (Reuters) - British Prime Minister Gordon Brown sought to fend off a challenge to his authority on Friday, reshuffling his cabinet to secure the loyalty of several ministers and averting a government collapse.

In his second reshuffle in eight months, Brown changed the heads of 10 ministries, but retained his finance minister, foreign minister and the head of the business ministry, shoring up his power in the teeth of widespread party dissent.

"I will not waver, I will not walk away, I will get on with the job and I will finish the work," Brown told a news conference after giving details of the cabinet shake-up.

It included replacing six senior ministers who had resigned.

A day of high political drama took its toll on some markets, with the uncertainty sending sterling to a two-week low against the euro, before it recovered some ground. The possibility of Brown's government collapsing has caused rumor and uncertainty in currency markets all week.

But there was some relief for investors that finance minister Alistair Darling remained in his job. The bond market was largely unaffected and the main London stock index rose 1.2 percent.

Brown's government has been under severe pressure for the past month, after a parliamentary expenses scandal exposed wrongdoing among politicians from all parties and left voters angry with the incumbents.

DARLING STAYS ON