Cambodia's parties agreed to a power-sharing agreement in June

Correspondents say this is an important step forward in ending the long-running crisis which has left Cambodia without a proper government for nearly a year.

Hun Sen's Cambodian People's Party (CPP) won last year's general election, but without enough seats to rule alone.

After long months of negotiations, the CPP finally struck a deal with the royalist Funcinpec party last month.

The widely-revered king is in self-imposed exile in North Korea, after being sidelined throughout the 11-month political deadlock.

He had earlier refused to sign the bill to allow Hun Sen's reappointment, and analysts say his change of heart could be a sign that he is willing to support the political process again.

"(I) appoint Hun Sen as the Prime Minister of the royal government of Cambodia," the king wrote in a document signed on Wednesday.

"The Prime Minister has the duty to propose forming of government and seek the approval from the National Assembly."

The appointment gives Hun Sen his third elected term. He has already been prime minister for almost 20 years, making him one of the world's longest serving leaders.

The move should also clear the way for a new government to be formed.

Stalled schedule

The lengthy political wrangling has already prevented Cambodia from taking some important actions, including preparation to join the World Trade Organization and concluding plans for a genocide trial to try former Khmer Rouge leaders.

But despite Wednesday's announcement, the political skirmishes seem far from over.

On Tuesday Cambodia's acting head of state, Chea Sim - who is also head of the CPP - left the country for what was officially termed "health reasons".

But he is thought to have refused to sign the bill to endorse Hun Sen as prime minister, and opposition groups say that troops and police had surrounded Chea Sim's house to force him to leave.