CAPE TOWN - South Africa's parliament is set to choose Jacob Zuma as state president on Wednesday after his ruling ANC's resounding election victory, capping a remarkable political comeback.

After an eight-year battle with corruption charges that threatened to ruin him, Zuma takes on an economy that may already be in its first recession in 17 years, and challenges such as widespread poverty, crime and AIDS.

The new government is expected to leave conservative and fiscal policies in place in Africa's biggest economy to cushion the impact of the global credit crunch and reassure investors who fear Zuma may steer the economy to the left.

The charismatic former freedom fighter, whose graft charges were dropped just before the April 22 poll, will be inaugurated on Saturday and is expected to name a cabinet soon after.

Zuma has denied any wrongdoing and said he is the victim of a political conspiracy.

The fate of Finance Minister Trevor Manuel, widely respected by financial markets, will be closely watched by investors hoping for continuity.

Chief Justice Pius Langa began swearing in the 400 new MPs and the parliament was expected to elect Zuma at 1200 GMT.

Zuma, who headed the ANC's intelligence department during the fight against apartheid, survived a bruising power struggle with former state President Thabo Mbeki that split the ANC and led to the creation of a breakaway party.

MEDIATION SKILLS

Zuma's trade union and Communist Party allies, who want him to spend more on the poor, have helped him survive a series of crises that threatened to destroy his career, including rape charges dropped in 2006.

The charismatic politician is known for mediation skills which could enable him to prevent any new party fractures. In the 1990s, Zuma mediated between the ANC and the Inkatha Freedom Party to end political violence which left thousands dead.

Critics of South Africa's political system say the country is effectively a one-party state because of the ANC's dominance since the end of apartheid in 1994.

The party is still widely respected for its struggle against white-minority rule so voters in the election overlooked its policy failures.

But it will come under mounting pressure to deliver on 15 years of promises to help millions of blacks still living in grim townships.

United Democratic Movement leader (UDM) Bantu Holomisa on Tuesday urged opposition groups to merge into one party to offer a strong alternative to the ANC.

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