The formation of a Cabinet and Government in Iraq led by the Prime Minister, Ibrahim Jaafari, is as welcome as it is overdue. The announcement comes almost three months after elections in which millions of Iraqis defied intimidation and death threats to choose freely, for the first time in their lives, their parliamentary representatives. Since then, valuable time has been wasted in wrangling — so much for the conspiracy theory that the leadership would be a stitch-up by the “ occupying” forces.

The Shia Alliance, which controls 143 of the 275 seats, was deadlocked over inclusion of the Kurds and the under-represented Sunnis in a government that was broadly-based and representative of the main ethnic and religious groups. Argument raged not only between competing and ambitious factions among the Shia but also between secular and religious parties, between Kurds pushing for greater autonomy and others resisting further concessions and between Shia hardliners determined to purge the bureaucracy of former Baathists and Sunni pragmatists insisting on retaining officials with experience.

The deadlock was not only insulting to Iraq’s voters; it led to a dangerous power vacuum. The failure to appoint key officials jeopardised the country’s recovery. Emboldened by this drift, the insurgents have stepped up the terrorist campaign. After a welcome fall, bombings, assassinations and kidnappings have increased in recent days. Lacking enough trained police, the authorities have been unable to respond to this violence, directed at Shia civilians in the hope of provoking civil war and at key political figures to sabotage the return to normality.

London and Washington have been circumspect, even though there has also been barely concealed unease at the direction in which the political current has been moving. The fear has long been that, for all the talk of inclusiveness and forgiveness for past repression, Iraq’s Shia leadership is intent on establishing an exclusive hold on power and on imposing a Shia religious regime upon the country. That remains a concern. Sunni secularists have only themselves to blame for boycotting the election; but Iyad Allawi, the outgoing interim Prime Minister, also overplayed his hand in holding out for too many posts. As a result, his party has been excluded from power entirely, and will move, with justifiable trepidation, into opposition.

Mr Jaafari has vigorously defended both the balance and variety of his team, insisting that it fairly represents Iraq’s disparate regions and religions. However, the key posts remain unfilled: oil, defence, electricity, industry and human rights. Each is vital in determining Iraq’s political, economic and social development. To appoint a Sunni as defence minister, as originally proposed, was clearly unacceptable to the powerful factional Shia leaders, such as Muqtadr al-Sadr, who do not want any Sunni curb on partisan militias. Equally, the post of oil minister is vital to the Kurds, with vast resources in their territory; but others reject any factional control over vital oil wealth.

The new Cabinet has, at last, broken the stalemate. The real test will come in appointing top police, administrators and army officers. If Iraq is to overcome terrorism and factional strife, it is vital that Sunnis are better represented and that Shia dominance does not become a religious monopoly. Only then will Iraq fulfil its huge potential.