Leterme, 48, will head a five-party coalition of Dutch- and French-speaking parties. The new cabinet, consisting of 15 ministers, will replace that of interim PM Guy Verhofstadt, whose resignation was earlier accepted by the king.
Verhofstadt, who had been in power since 1999, agreed to head the Belgian government in December last year as Leterme twice failed to produce a new cabinet following his Flemish Christian Democrats party victory in the June parliamentary polls.
The 'apple of contention' at coalition talks was the idea voiced by Leterme that Flemish regions should be given more autonomy. The proposal was opposed by the French-speaking parties, who said the move could be the first step to the eventual break up of the country.
The former premier of Dutch-speaking Flanders, Leterme had earlier gained notoriety over his statements that French-and Dutch-speakers in Belgium have little more in common than beer, football, and frites.
The Belgian politician also shocked journalists and the whole country by singing the French national anthem, 'La Marseillaise', instead of the Belgian one, 'La Brabanconne,' on Belgian National Day.
After the coalition talks had failed, Belgium, divided between Dutch-speaking Flanders in the north and French-speaking Wallonia in the south, was hit by the worst crisis in the country's 177 year-old history. This prompted speculation that the country could simply break apart.
Skeptics predict however that more tensions could arise between francophone Walloons and the Dutch-speaking Flemish in the near future. They also doubt whether the new government will last long.
