*Garcia shakes up Cabinet in worst crisis of term

*Retains Finance Minister Luis Carranza

(Recasts, adds quotes, details on ministers)

By Marco Aquino and Terry Wade

LIMA, July 11 (Reuters) - Peruvian President Alan Garcia named a member of his pro-business ruling party as prime minister on Saturday after bowing to opposition pressure to shake up his Cabinet in the worst crisis of his term.

Garcia picked Javier Velasquez, a member of the APRA party and the head of Congress, to take over leadership of his team of ministers at a time when the president's approval rating has plunged to 21 percent.

He also retained Finance Minister Luis Carranza, a favorite of investors who is in the middle of rolling out a $3.2 billion stimulus program to help the economy to grow 3 percent this year.

As prime minister, Velasquez will face growing calls from unions, indigenous groups and the poor for the government to increase social spending as unemployment rises and the economy slows from last year's 10 percent surge.

Opposition parties have demanded Cabinet changes since last month when at least 34 people died in clashes between police and indigenous groups in the Amazon rain forest.