Portia Simpson Miller has been sworn in for the second time as Jamaica's prime minister with a pledge to ease poverty, boost the economy, heal political divisions and drop the Queen as head of state.

Simpson Miller, who was prime minister for a year and half until 2007, took the oath of office before roughly 10,000 guests on the grounds of the governor-general's official residence.

The 66-year-old politician scored a dramatic victory in last week's national elections, leading her centre-left People's National party to a 2-1 margin in parliament over the centre-right Jamaica Labour party. Her opposition faction won a dominating 42 seats in the 63-seat legislature, leaving the incumbent party with 21.

Simpson Miller, Jamaica's first female prime minister, takes over from Andrew Holness, a 39-year-old Labour MP who led the government for just over two months.

"After being tested and tempered I stand before you today a stronger and better person prepared to be of service to my country and people," Simpson Miller said at the start of a spirited 45-minute speech.

She said her government intended to abandon the British monarch as Jamaica's official head of state and instead adopt a republican form of government. Jamaica declared independence from Britain in 1962 but remains within the Commonwealth and has the Queen as head of state.

"I love the Queen; she is a beautiful lady," Simpson Miller said, before declaring to the audience in Jamaican patois: "But I think time come."

Simpson Miller said she could replace the privy council in London with the Trinidad-based Caribbean court of justice as Jamaica's highest court of appeal. She said this would "end judicial surveillance from London".

She vowed her government would "ease the burdens and the pressues of increasing poverty, joblessness and deteriorating standards of living" while also pursuing a tight fiscal policy and forging strong partnerships with the private sector and international partners such as the International Monetary Fund.

"My administration will work tirelessly that while we try to balance the books we balance people's lives as well," Simpson Miller said.

Jamaica has a punishing debt of roughly $18.6bn (£12bn), or 130% of GDP.

In the short and medium term the prime minister said her administration would use "state resources" to stimulate jobs through an emergency employment programme that was the centerpiece of her party's campaign manifesto.

Her People's National party has said it will try to renegotiate roughly 25% of a troubled $400m road programme financed by China in order to transfer some of the money to the employment programme.

The prime minister urged Jamaicans to create a more civil and respectful society and earnestly strive to make the best of themselves.

"We will seek to make this country one of brothers and sisters, not of rivals and victims," she said.

After her speech, Simpson Miller elicited laughter from the audience by dragging a slightly embarrassed-looking Holness, now the leader of the opposition, to the podium and saying she was his "second mother".

Holness had been elected unopposed to succeed Bruce Golding as head of the ruling Jamaica Labour party, becoming prime minister in the process.

Golding, 63, stepped down because of fallout from his handling of the extradition of Jamaican gang leader Christopher "Dudus" Coke last year.

After initially fighting Coke's extradition to New York on drug-trafficking charges, Golding's administration bowed to US pressure in May 2010 and sent police and the military in to arrest him. Seventy-six people died in the ensuing gun battles between government forces and Coke's supporters.