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Interior Minister Roni Bar-On is likely to replace Abraham Hirchson as finance minister, sources close to Prime Minister Ehud Olmert said yesterday.

Olmert will decide next week from among three Kadima candidates - Bar-On, MK Haim Ramon and Housing Minister Meir Sheetrit. Hirchson suspended himself in April amid police investigations into his affairs.

The sources said Olmert would not want to risk another controversial appointment that would trigger petitions to the High Court of Justice, as Ramon's appointment would likely do.

Labor Party chief and Defense Minister Ehud Barak has also indicated he would prefer that Ramon not be appointed finance minister or given a portfolio requiring work with Barak because of the tense relations between the two.

Sheetrit sees himself as the most suitable candidate for finance minister, but Olmert fears he would be too independent, while he is confident of good cooperation with either Ramon or Bar-On.

Olmert admires Ramon and wants to give him a central role in the cabinet. Olmert has been advised to create a senior portfolio for Ramon and add him to the security cabinet, rather than give him the treasury.

After choosing a finance minister, Olmert will continue the cabinet reshuffle by appointing a new head for the Negev and Galilee Development Ministry to replace Shimon Peres, who was elected president. Olmert will also choose a minister to replace Bar-On or Sheetrit should one of them be the next finance minister.

Barak, for his part, will have to decide which Labor member to appoint minister to replace Labor secretary general Eitan Cabel, who was minister without portfolio in charge of the Broadcasting Authority before resigning a few weeks ago.

MK Amir Peretz, the former defense minister, has turned down the post. If MK Ami Ayalon rejects it as well, Barak could offer it to one of his supporters, MK Matan Vilnay or MK Danny Yatom. Barak must also appoint a deputy defense minister now that MK Ephraim Sneh was forced to resign following Peretz's resignation.