Environment yesterday, but calls for Mr. Smith's removal from Cabinet continued.

In rejecting Mr. Smith's resignation from Cabinet over controversial remarks he made about a Planning appeal, Dr. Saul said he had instead decided to "re-assign'' the young Minister.

Mr. Smith would switch jobs with Ms Pamela Gordon and become Minister of Youth and Sport, while Ms Gordon would become Environment Minister, the Premier said at a news conference.

He maintained that Mr. Smith's "mistake'' was no reason for him to lose his job. However, "I do believe that his own personal confidence at the Ministry...has been somewhat shaken.

"As a consequence, I have done this re-assignment.'' Dr. Saul refused to say that Mr. Smith, who only joined the Cabinet in August, had been demoted. In fact, Youth and Sport, along with Education, were "probably the two most important ministries in the Country'', he said.

Opposition Leader Mr. Frederick Wade laughed aloud when asked if the change in portfolios answered his concerns. The refused resignation and Cabinet switch "smacks of a set-up from the very beginning'', he said.

"What the Premier has done is shameful,'' Mr. Wade said. "If Mr. Smith is unfit for Planning, he's certainly unfit for Youth and Sport -- in fact, he's more unfit.

"It's not the kind of example we wish to give to our young people.'' The Progressive Labour Party caucus would discuss the matter at a meeting tonight, but "we certainly still hold the view that the Premier ought to have accepted his resignation'', Mr. Wade said.

Government backbencher Mr. Trevor Moniz -- the main target of Mr. Smith's remarks -- described the announcement as "bizarre''.

"It appears that Tim Smith may now have gotten the point, but obviously the Premier has totally missed it,'' Mr. Moniz said.

It was not for him to say whether Mr. Smith should leave Cabinet, but "I think it's bizarre if he thinks this resolves the problem''.

"The Premier is just playing a silly game of musical chairs.'' Mr. Smith got in trouble over off-the-cuff remarks he made in the House of Assembly on November 10 which were picked up by a microphone and broadcast over the air.

The Paget West United Bermuda Party MP voiced his frustrations at a group of Government backbenchers dubbed "the people's five,'' who minutes earlier had stayed away from a vote and allowed Opposition MP Mr. Stanley Lowe to defeat Government nominee Mrs. Grace Bell for the Deputy Speaker's post.

Speaking to former Cabinet Minister Mr. Irving Pearman, Mr. Smith described the group as "nasty'' and "wicked,'' before turning to a Planning appeal that was before him from Mr. Moniz -- one of the five.

"He's got an appeal in to me for an illegal house,'' Mr. Smith told Mr.

Pearman. "I haven't even looked at it. I said I ain't looking at it for now.

The naughty b*****.

"He built it anyway. Couldn't care less. They're a law unto themselves.'' Mr.

Smith apologised in the House on Friday and said he had disqualified himself from hearing the appeal, but pressure continued for him to resign. On Monday, Mr. Smith handed a letter of resignation to Dr. Saul, who said he would announce yesterday whether he accepted it.

In the letter, Mr. Smith said that despite his apologies: "I believe the Government is vulnerable to continued criticism.

"After careful consideration and reflection, my resignation is only right and proper.'' Dr. Saul said Mr. Smith's letter was "proof positive of the mettle of the individual''.

Yesterday, he wrote back to Mr. Smith, saying: "I cannot accept your resignation from the Cabinet. However, upon reflection, I feel it would be appropriate to relieve you of the responsibility for Environment, Planning, and Natural Resources and assign to you responsibility for Youth Development, Sport and Recreation, with effect from today.'' Mr. Smith told The Royal Gazette he was "delighted'' with his new Ministry and hoped the switch in portfolios would end the matter. "It was an unfortunate blunder on my part,'' he said. "It was an extremely short-lived event. I am exceedingly keen to move on.'' He said he was "humbled'' and "honoured'' when the Premier asked him to take the new post, and "I offered no resistance whatsoever''.

Ms Gordon, the Youth and Sport Minister since March, 1992, could not be reached for comment.