Cuba's communist party has endorsed President Raúl Castro's economic reforms but retained the old guard leadership, disappointing those who hoped for new blood at the top.

A party congress on Tuesday confirmed Castro, 79, as first secretary and named José Ramón Machado Ventura, an 80-year-old political veteran, as his deputy, wrapping up a four-day gathering in Havana.

The first congress in 14 years approved more than 300 proposals to liberalise the island's creaking economy, potentially setting Cuba on a gradual path to Vietnam-style capitalism in all but name.

Fidel Castro, 84, made an unannounced appearance alongside his brother and successor, prompting a standing ovation and tears from the 1,000 delegates.

The former president, who wore a blue tracksuit and was helped to his seat by an aide, has relinquished all party and state posts for the first time in half a century. He wrote in a state website post published on Tuesday that he did not want any honorary position. "I think I have received too many honours. I never thought I would live so many years. Raúl knew that I would not accept at this time any position in the party."

His appearance was interpreted as a sign of support for the changes and a farewell to what was almost certainly his last congress.

Raúl, who succeeded Fidel in 2008, surprised many by proposing a limit of two five-year terms for senior office holders, including himself, to "rejuvenate" the geriatric leadership. Nevertheless Machado, an old-school ideologue, was named as his deputy and Ramiro Valdés, a grizzled 78-year-old vice-president, was named number three.

Several younger colleagues were promoted to lower-ranking posts on the 15-member ruling committee, including Marino Murillo, 50, who is tasked with implementing the reforms, Adel Izquierdo, 65, the economy minister, and Lázara Mercedes López Acea, 46, head of the party in Havana.

"Murillo is one to watch. Whatever changes come to Cuba will come not from the opposition but within the ruling class," said one European diplomat in Havana.

In his website column Fidel hinted that younger committee members may call the shots while older, ostensibly more senior colleagues fade away. "There were some colleagues who, because of their years and poor health, can no longer do service to the party, but Raúl thought it would be very tough on them to exclude them from the list of candidates."

Many of the 300 proposals to shake up the centrally planned economy are already in evidence. In recent months Cubans have taken out more than 170,000 licences for new businesses such as flower stalls, beauty parlours, barber shops, taxis and restaurants. The hope is that a liberated private sector will soak up a million workers laid off from the state sector, a fraught mass cull so far delayed by bureaucratic resistance.

In a speech closing the congress Raúl told Cubans to be patient: "Modernising the economic model is not a miracle that can be accomplished overnight like some believe."

The congress reportedly approved plans to legalise the selling and buying of cars and houses, some of the most closely watched proposals, but it was not immediately clear if all restrictions would be removed. Subsidies, notably a monthly ration book, are expected to be slashed.

The changes, billed as steps to save socialism rather than usher in capitalism, are expected to be voted into law by the national assembly in coming weeks.