OTTAWA -- Canadian Prime Minister Jean Chretien, whose government is mired in increasingly serious allegations of sleaze and corruption, on Sunday abruptly removed two ministers who have caused considerable embarrassment, Reuters reported.

Chretien, saying the government had let down its guard, sacked long-term ally, Defense Minister Art Eggleton, and moved scandal-hit Public Works Minister Don Boudria to a less sensitive cabinet post.

During his nine years in power Chretien has made a point of standing by ministers in trouble, and the unexpected and startling changes show how badly he has been damaged by revelations that fat government contracts were regularly awarded to friends of the ruling Liberal Party.

"We were having a few problems in public life...which we had to manage as best we could. So in everyone's interest I made the changes," Chretien told reporters.

"After nine years people perhaps got a bit too comfortable so (this) will teach a lesson to all of us." Eggleton lost his job after a newspaper revealed on Saturday that a former girlfriend had been given a military contract worth $36,500 ($24,000), and there had been no open tender for the deal.

Eggleton, who embarrassed Chretien in January by not telling him that Canadian troops had taken prisoners in Afghanistan, said there was nothing to the story, but was forced to quit.

Boudria was at the center of the furor over contracts and faced mounting opposition ire after it emerged he had stayed in a luxury mansion owned by the president of an advertising agency that won government contracts.

The crisis is particularly galling for Chretien, who won office in 1993 campaigning against what he said was the sleaze of the outgoing conservative government.

"This is a government in crisis...this is a party in crisis," said John Reynolds of the official opposition Canadian Alliance, which has for months been accusing the government of corruptly awarding contracts to its friends.

Chretien's problems increased dramatically on Friday when police launched an official inquiry into how three contracts worth c$1.5 million had been awarded to a firm which was a major backer of the Liberals.

The day before Chretien had promised to bring in tougher ethics rules for ministers and politicians to counter mounting opposition attacks on his government's record.

Chretien's Liberals have a healthy majority in Parliament and remain far ahead of other parties in opinion polls. But as new revelations emerge, the four opposition parties are doing their best to whittle away at that lead. Chretien, 68, has not yet said whether he intends to step down soon or lead the party into the next election. Asked whether he was fed up with recent events, he replied: "I don't know. Things are accumulating."