The government said in a statement on Thursday that Tharman Shanmugaratnam, a former central banker, would give up his main job of education minister to concentrate on finance after the budget debate early next year.

Prime Minister Lee Hsien Loong, 55, would make "consequential changes" to the cabinet after that, the statement added.

He gave no indication what the reshuffle would involve, but political observers believe that his two deputies -- Wong Kan Seng and Shunmugam Jayakumar -- who are both older than Lee, could make way for a new generation of politicians.

Among the highest profile members of the current cabinet are Tharman, Defence Minister Teo Chee Hean, and Foreign Minister George Yeo.

Lee's handover to Tharman comes as Singapore's trade-dependent economy is on track for growth of 7.5-8 percent this year.

"It's not a surprising move as Tharman has been long earmarked for the financial minister position since he was recruited," said Seah Chiang Nee, a political commentator and former Singapore newspaper editor.

In a sign that Tharman was being groomed to eventually take over as finance minister, he delivered this year's budget speech to parliament instead of Prime Minister Lee, the son of Singapore's founding father Lee Kuan Yew.

"The last budget debate became a stage for Tharman to answer questions and so that was a test of his abilities, and apparently Lee Hsien Loong now thinks he is up to the mark," said political scientist Ho Khai Leong of Singapore's Nanyang Technological University.

Tharman is a trained economist and former central bank managing director.

He was fined S$1500 as director of the central bank's economics department after being found guilty on one charge of endangering the secrecy of unpublished growth data in 1992.

He became a politician in 2001, and was appointed education minister in August 2004, before also becoming second minister for finance in May 2006.

Lee, who has held the post of finance minister since 2001 and succeeded Goh Chok Tong as prime minister in 2004, has often talked of his search for a successor.

"Nobody knows who will be the next prime minister. Politics in Singapore is very secretive where appointment of ministers is very much a non-public thing," Seah said.

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