Edinburgh Pentlands MSP Iain Gray has been announced as the new minister for enterprise, transport and lifelong learning.

Gray will be replaced as social justice minister by his deputy Margaret Curran, while Hugh Henry will become her deputy, replaced in the health post by former minister Frank McAveety.

The reshuffle follows Wendy Alexander's announcement on Friday that she was quitting the Holyrood executive.

She made her first public appearance since the resignation on Tuesday when she joined prime minister Tony Blair at the unveiling of a bronze statue of Donald Dewar, Scotland's first first minister.

"I hope this memorial will remind us of more than Donald Dewar the man. I hope it will remind us of what he stood for - values like decency, fairness and social justice," Blair said.

"Donald loved Glasgow as he loved Scotland and the feeling was clearly mutual.

"People loved him quite simply because the sheer integrity of the man shone through. His compassion, his fundamental decency and his deep sense of social justice defined his entire approach as a politician."

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Business leaders have expressed concern about whether Gray, a former physics teacher, will be able to cope with the size of the workload, a factor which is believed to have contributed to Alexander's decision to quit.

They are also nervous that he has no business experience. However, in response, Gray claimed that his political experience was more important.

"I've not been appointed to be a business person or indeed to actually run business in Scotland, I've been appointed to a ministerial post," he said. "I've got very significant ministerial experience in a number of different areas."

Alexander: A rising star?

Appointed to her current portfolio by Jack McConnell last year, Alexander was once tipped as a potential first minister.

Despite signalling that she was set to contest last year's leadership election, she stood aside at the 11th hour - a move which angered many of her supporters.

Alexander, a Brownite who does not enjoy good relations with McConnell, said she had taken the decision to stand down at the new year.

In her letter of resignation she said: "We have worked together for over 20 years and over that time your commitment to achieving real and positive change in the lives of people across Scotland and elsewhere has been one that we have shared

"I now however, feel the time is right for me to stand down from ministerial office and ask you to accept my resignation from the Scottish cabinet.

"In so doing, I am acting on a decision that I took at the turn of the year, but I was committed to first fulfilling the task you asked of me in preparing the new transport strategy and I was also determined to avoid adding unnecessary pressures on colleagues in your administration's early months."

McConnell said he regretted Alexander's decision to resign from the executive. "I was very sorry to receive your letter of resignation as minister for enterprise, transport and lifelong learning," he said.

"We have worked together for over 20 years and over that time your commitment to achieving real and positive change in the lives of people across Scotland and elsewhere has been one that we have shared.

"I understand the pressures of political life and the demands it makes of all of us. Whilst I regret your decision to resign I understand too, your wish to take a well deserved break from those pressures and I accept the your resignation."

However, Scottish National Party leader John Swinney said: "She would appear to have been driven to resign by the cynical in-fighting at the top of the Labour party, with Mr McConnell surrounding himself with cronies and pushing any talent to the margins."