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As part of the proceedings, held in the great reception hall of the palace, the collar of the Grand Master of the Legion of Honour was placed around the incoming president's neck.
Retiring president, M. René Coty, welcomed the new president saying: "The first among Frenchmen is now the first in France."
A salute of 21 guns was fired on the banks of the Seine to mark the solemn occasion.
New prime minister appointed
Under the new constitution President de Gaulle is also the head of the French Community - which includes most of the former overseas territories in French Black Africa.
Speaking for the first time as president, General de Gaulle said: "In the majestic character of this ceremony the renovated institutions of the Republic and the new institutions of the Community enter into force.
"Long live the Community, long live the Republic, long live France."
The inauguration was attended by a large number of dignitaries including the President of the Senate and the Assembly, representatives from all the state institutions of France, members of the judiciary, academics and military representatives.
The 12 African Premiers of the republics also attended.
Following the ceremony, President de Gaulle, accompanied by ex-president Coty, was driven to the Arc de Triomphe, where he rekindled the flame at the tomb of the unknown soldier in memory of France's war dead.
And within an hour of officially taking up the reigns of power President de Gaulle carried out his first presidential duty by appointing committed Gaullist Michel Debre as his prime minister.
The new French government was approved by the President this evening.
The installation of President de Gaulle marks the end of an eight-month transitional period in France following near civil war when the French in Algeria staged a revolt against independence.
During World War II General de Gaulle, who was undersecretary of state for war, resisted surrender to the Germans.
When Marshal Petain, who was committed to an armistice with the Germans, became premier of France, de Gaulle fled to London where he led the French Resistance Movement.
In July 1940 he was sentenced to death for treason by a French court martial, but his Free French movement continued to gather momentum and attracted large-scale support from French colonies in West Africa and the underground movement in France.
After the war, de Gaulle was unanimously elected president of the provisional government in October 1945, but resigned in January 1946 after a new constitution for the country could not be agreed upon.
De Gaulle disapproved of the constitution of the Fourth Republic and withdrew from politics to write his war memoirs.
He was called upon in 1958 to avert civil war in Algeria and on 1 June of that year was named premier and granted wide emergency powers including the right to prepare a new constitution.
In December 1958 de Gaulle was elected president by a 78% vote. In 1965 he was elected president for a second seven-year term but resigned in 1969.
He died from a heart attack on 9 November 1970, aged 79.
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