By Marco Aquino and Terry Wade
LIMA (Reuters) - Peruvian leftists who supported President Ollanta Humala for years are leaving the government and may stop supporting him in Congress, saying his emerging authoritarian tone amounts to a further drift to the right.
At least two high-profile leftist aides who felt betrayed have quit their posts and more resignations are expected after Humala, a former military officer, shuffled his Cabinet over the weekend.
Humala picked as prime minister his instructor from the military who had led a crackdown on anti-mining protests.
In Congress, prominent leftists in Humala's Gana Peru party are openly criticizing him and may withdraw support, frustrated by his bent for tougher law-and-order and firm support for the country's free-market economic model.
Humala may also lose votes in Congress from smaller center-left parties that had helped give him a working majority.
"The situation in Congress is now very delicate - the chance for consensus has been greatly reduced," said Congressman Javier Diez Canseco, who leads a group of seven left-wing lawmakers. "A good part of the left and the provincial political movements who had supported him have been sidelined."
On its own, Humala's party has just 47 seats in a Congress of 130 lawmakers.
Support in Congress from a party called Peru Posible, which had caucused with the ruling party, will likely wane after its head, former President Alejandro Toledo, criticized Humala's Cabinet shake-up as a "militarization of the government."
A weaker hand in Congress could stymie pending bills that would reduce informality in the labor market, reduce management fees in the private pension fund industry, and overhaul the tax code to fund new welfare programs Humala says are crucial.
Diez Canseco said two interest groups gained strength in the Cabinet overhaul: the military and police as well as the business community. Both constituencies feared a growing wave of environmental protests would shut off Peru's economic engine by holding up $50 billion in private investments planned for the mining and oil sectors.
When he took office, Humala vowed to steer more social spending to rural towns and said he would "dialogue" with local communities to defuse hundreds of disputes over natural resources.
He has since found mediation difficult and labeled as "intransigent" protesters who voted for him in the hope that he would usher in a period of rapid social change. One third of Peruvians are still poor, left behind by a decade-long economic boom.
Peru's new prime minister, Oscar Valdes, who had been interior minister, reportedly urged Humala to declare a state of emergency last week that gave the army and police special powers to halt protests against the $4.8 billion Conga gold mine proposed by U.S.-based Newmont Mining.
Days later, Peru's counterterrorism police detained two leaders of the protest as the crackdown widened. Conga would be the biggest investment ever in the history of Peru's vast mining sector.
PERU'S PARADOX: A TURN TO THE RIGHT
Humala, who shed his hard-line past to reinvent himself as a moderate leftist to win the presidency in June, was fiercely attacked by the right, which compared him in a bruising campaign this year to Venezuelan leader Hugo Chavez.
"Peru's paradox is that those who insulted and attacked Humala are now happily in power and the left that supported him has been sidelined in an ugly way," said Juan Sheput, a leader of the Peru Posible party.
Critics on the left were alarmed by the appointment of Valdes, fearing it would lead to another authoritarian government in a polarized country with a history of strongmen.
Some even drew parallels to the government of jailed former President Alberto Fujimori, who emphasized law-and-order, free markets, and social programs for the poor.
Fujimori is now in prison for corruption and human rights crimes stemming from a counterinsurgency against leftists. Humala has criticized Fujimori's record and defeated his daughter, Keiko Fujimori, in this year's election.
As the left complained, Keiko Fujimori and her right-wing party endorsed the Cabinet shake-up, saying Humala would "lose support in some sectors but gain it in others."
Keiko Fujimori may be angling for a pardon for her father by offering Humala's party support in Congress, analysts say.
Valdes, who became a business executive after leaving the military in 1991, has dismissed concerns that the government was being "militarized" but said the new Cabinet would be more pragmatic and less political.
"The president wants a Cabinet focused on management, that is more technical and does less politicking," Valdes said on RPP radio. "Foreign investors should be very calm and continue to bet on Peru, which will be better managed."
Mario Huaman, leader of Peru's largest labor confederation, said Humala has become too conservative. Unions are concerned that he won't make good on his promises to lift the minimum wage again, tighten labor protections, and limit outsourcing.
"We think that he has now taken a turn to the right and probably won't fulfill his promises," Huaman told reporters.
(Additional reporting by Omar Mariluz and Patricia Velez; editing by Christopher Wilson)