Daim said that Najib had inherited a Cabinet and its problems from his predecessor Tun Abdullah Ahmad Badawi.
"It's difficult when you take over. There were mistakes in the past, and for Najib to change (this)... with a new mandate he can do it," he told reporters at the Mara Junior Science College on Saturday.
He called some high-level officials "deadwood", and said they needed to step down and make way for a new government administration.
"We must choose a Cabinet that will be accepted by the people. My advice to the deadwood is this; please stop," he said.
Several ministers will not be part of the Cabinet if Najib returns to power after the May 5 polls.
They include Datuk Seri Dr Rais Yatim, Datuk Seri Ng Yen Yen and Tan Sri Nor Mohamed Yakcop.
On the elections, Daim felt that BN would take back Kedah and Selangor as long as BN leadership in both states were united.
He said that it would be difficult wrest Penang back from the Opposition, and BN would win more seats in Kelantan, possibly taking back the state.
He was also confident BN would hold on to Sabah and Sarawak, adding the Opposition might win a few seats though not nearly enough.
However, Daim said that it was difficult to predict if BN could gain a two-thirds majority, and he warned BN not to be over-confident of such a result.
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