By Shapi Shacinda

Lusaka - Zambian President Levy Mwanawasa on Monday said defeated opposition leader Michael Sata risks treason charges for planning to run local councils as a de facto parallel government.

Sata, who lost to Mwanawasa in a bitterly contested Sept. 28 presidential poll, said the election was rigged but urged his supporters to turn their attention to wielding power at the municipal level in the capital Lusaka and elsewhere.

The opposition leader has said his Patriotic Front (PF) party won enough seats to cut local taxes and review some contracts at the municipal level, a suggestion seen as threatening to foreign investors and Mwanawasa supporters.

"A statement was made by Sata that he wants to run a parallel government through local authority. The time for confrontation is over and Sata has reached the verge of treason. Interfering with the smooth running of the government is treason," Mwanawasa said on Monday after naming a new cabinet.

"Let him not push his luck too far, I will sort him out," Mwanawasa said in a press conference. "I will run his local authorities if he forces me to do so."

In announcing his new cabinet, Mwanawasa offered few surprises. He retained Ng'andu Magande as finance minister and Kalombo Mwansa as mining minister, two portfolios seen as key by investors in the copper-rich southern African nation.

The Zambian president also appointed retired Zambian opposition figure Rupiah Banda as vice president, replacing Lupando Mwape, who was defeated in northern Zambia in the parliamentary election.

Analysts said Banda's appointment appeared to be a reward to voters in the eastern part of the country, which sided with Mwanawasa's Movement for Multiparty Democracy (MMD) party for the first time since the 1991 elections.

Other Mwanawasa allies named to the cabinet included former Foreign Minister Ronnie Shikapwasha, who becomes home affairs minister, and former Agriculture Minister Mundia Sikatana, who takes over as foreign minister. George Mpombo, a former junior minister, is Zambia's new defence minister.

Mwanawasa, who has made fighting graft a centrepiece of his administration, also said he planned to disband a task force on corruption because of its "dismal performance" in recovering funds stolen from the government.

The Zambian leader's anti-graft campaign has focused on his former mentor and president Frederick Chiluba as well as senior members of the former administration. Chiluba denies any wrongdoing and accuses Mwanawasa of a political witchhunt.

Mwanawasa said he would provide more financing to the state anti-corruption commission and drug enforcement commission, which he said had performed better than the task force, which was established in 2002.