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By Joe Bavier

KINSHASA, Oct 10 (Reuters) - Democratic Republic of Congo President Joseph Kabila named Budget Minister Adolphe Muzito as prime minister on Friday, according to a presidential decree read out on state television.

Muzito, 51, replaces his Unified Lumumbist Party (PALU) leader Antoine Gizenga, who retired last month ahead of his 83rd birthday on Oct. 5.

Muzito has earned praise from diplomats and donors for his fiscal discipline in pushing through austere budgets for Congo following years of political turmoil and a devastating 1998-2003 war that left much of the country's infrastructure in ruins.

"We are very happy. He is a man who is up to the job. Democratic Republic of Congo has found a good prime minister," Mines Minister Martin Kabwelulu, a PALU ally, told Reuters.

Muzito's appointment ends speculation Kabila would end PALU's government leadership by appointing someone from his own People's Party for Reconstruction and Development (PPRD).

Gizenga was appointed prime minister in late 2006 under a deal in which PALU backed Kabila in a presidential run-off vote against former rebel leader Jean-Pierre Bemba. Gizenga had won 13 percent of votes in the first round, behind Kabila and Bemba.

Gizenga's appointment was seen at the time as a marriage of convenience aimed at boosting support for the Swahili-speaking Kabila in the country's Lingala-speaking west, where PALU is popular but where the president enjoys little support.

TOUGH JOB

Muzito faces a difficult task. During nearly two years in office, Gizenga and his administration came under increasing criticism for not doing enough to revive Congo's war-shattered economy and end continuing conflict in its eastern borderlands.

Economic revival depends largely on foreign investments in the vast former Belgian colony's potentially lucrative mining sector, a treasure trove of largely unexploited concessions.

Next week the government is due to announce the results of contract renegotiations undertaken as part of a review of mining deals, most of which were agreed during the war years and a subsequent corruption-plagued three-year transition government.

The process has been repeatedly delayed, and may be again.

Muzito's appointment also coincides with an escalation of tension with eastern neighbour Rwanda this week.

Kabila's administration accuses Rwanda of sending troops to help rebel Congolese Tutsi General Laurent Nkunda capture an eastern army base at Rumangabo and threaten Goma, the capital of North Kivu province. Rwanda denies the accusations.

Kabila -- catapulted to power by the January 2001 assassination of his father Laurent Kabila, himself a former eastern rebel leader -- has failed to end protracted conflicts in the east of the country.

But hundreds of miles (km) away in the western capital Kinshasa, he has progressively tightened control over Congo's administration since winning the 2006 presidential run-off vote.

Pro-Kabila parties already dominate both houses of parliament and most provincial assemblies.

Jean-Pierre Bemba, initially opposition chief in the Senate, is now behind bars in The Hague charged with leading a campaign of rape and torture in Central African Republic in 2002-2003. (Reporting by Joe Bavier; Editing by Alistair Thomson and Charles Dick)

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