Mr Morales says he wants to share the burden of the poor

The decision means that the salaries of all Bolivian public sector employees will be reviewed, as no official can earn more than the president.

Mr Morales said the money saved would be used to increase the numbers of doctors and teachers.

Mr Morales suggested that members of Congress should cut their salaries too.

During the campaign, Mr Morales had pledged to halve his own pay if elected.

The move announced after his first cabinet went beyond that, with a cut of 57%.

BBC South America correspondent Daniel Schweimler says many voted for Mr Morales believing that he was different from the more conservative politicians who have governed in the past.

The former llama herder and coca leaf farmer was inaugurated last Sunday as Bolivia's first indigenous president.

He has promised to fight corruption, introduce a new tax on the wealthy, and renationalise energy companies.