The agreement came after nearly a year of political stalemate

The Cambodian People's Party (CPP) and Funcinpec have signed a deal which will keep Prime Minister Hun Sen in power.

Cambodia has been without a proper government since last July's elections failed to give any one party the majority needed to govern alone.

At first Funcinpec's Prince Norodom Ranariddh refused to work with Hun Sen, accusing him of being an autocrat.

But after protracted negotiations, the two parties have finally set aside their differences and agreed to form a coalition.

At a televised ceremony in the Cambodian Senate on Wednesday, they signed an agreement to "make sacrifices in order to build Cambodia".

Both leaders were keen to show their support for the new coalition.

"This is a historical solution, which the king and the queen, the Cambodian people and the international community have been waiting for," Hun Sen told reporters.

Prince Ranariddh said both parties had "achieved success for our whole nation".

Under the deal, the number of government posts have been dramatically increased - with over half of them going to the CPP.

The remainder have been earmarked for members of Funcinpec, but some posts may be handed over to another opposition group, the Sam Rainsy Party.

Hun Sen said on Tuesday that he expected the new government to be in place by mid-July.

One of the new assembly's first tasks will be to pass legislation to allow a UN-backed tribunal to try the surviving leaders of the genocidal Khmer Rouge regime.

The government is also expected to ratify Cambodia's entry into the World Trade Organisation.