Update 2.18pm: New Defence Secretary Gavin Williamson has said he is "both honoured and excited" by his promotion, following Sir Michael Fallon's resignation amid sleaze allegations.
The former chief whip's appointment by Theresa May to one of the Cabinet's most senior posts provoked widespread surprise at Westminster, as he has never before held ministerial office.
And there were signs of consternation in Conservative ranks, with some backbenchers suggesting that the 41-year-old South Staffordshire MP lacks experience and may have earned his meteoric rise by his staunch loyalty to the Prime Minister.
One Tory former minister, who did not want to be named, said some of the party's MPs were in "head-in-hands despair" at Mr Williamson's "bizarre" appointment.
"The feeling is it's just a move that demonstrates Theresa May's own weakness by allowing the guy who suggested to her that Fallon should go to take that job," the MP told the Press Association.
"It's a bizarre appointment from somebody who's so shell-shocked she doesn't know which direction to turn in and so is listening to the person she just likes and trusts rather than having a view about it herself."
And in an apparent reference to Mr Williamson's promotion, Tory MP Sarah Wollaston tweeted: "There are times when offered a job that it would be better to advise that another would be more experienced & suited to the role."
Sir Michael quit on Wednesday after admitting his behaviour had "fallen below the high standards required" in the role and acknowledging that what might have been acceptable in the past was no longer appropriate.
He was one of the most senior ministers to be caught up in a wave of allegations of improper behaviour swirling around Westminster, after admitting putting his hand on the knee of radio presenter Julia Hartley-Brewer some years ago.
Mr Williamson was replaced as chief whip by his former deputy Julian Smith, while Tatton MP Esther McVey - a former TV presenter who served as a minister in David Cameron's government - was made deputy chief whip.
In a statement following his installation at the Ministry of Defence offices on Whitehall, Mr Williamson said he was "determined to ensure that the armed forces receive the recognition they deserve for the great work they do, including through the Armed Forces Covenant, and that they evolve both to meet the changing threats that we face and to ensure that they properly represent the modern society that they defend".
Mrs May ignored questions about her domestic difficulties as she welcomed Israeli prime minister Benjamin Netanyahu to Number 10.
The PM's official spokesman told reporters that Mr Williamson was not involved in discussions about the reshuffle following Sir Michael's resignation, as chief whips often are.
Asked what qualities Mrs May felt her new minister would bring to the job, the PM's spokesman said: "Gavin Williamson was an excellent and hard-working chief whip and the Prime Minister thinks he will make an excellent Defence Secretary.
"The PM is confident in the operation of the whips' office during her premiership."
The spokesman declined to say whether any further allegations about Sir Michael had been raised with the Prime Minister before his resignation, saying only that the former defence secretary had set out the reasons for his decision to resign in his letter on Wednesday to Mrs May.
Asked if Sir Michael had set a new bar for behaviour requiring ministerial resignation, the spokesman said Mrs May took any allegations of misconduct "seriously" but stressed that complaints would be dealt with on a case-by-case basis.
He added: "The Prime Minister was absolutely clear in the House of Commons yesterday that Westminster needs to be a place where everybody who works there feels they can do so safely and free from harassment and if they make complaints they will be taken seriously."
Her invitation to other party leaders to discuss a possible new grievance system showed that she accepted that there was "room for improvement" in the way complaints were dealt with, he said.
Earlier story: Theresa May is set to appoint a new defence secretary after Sir Michael Fallon became the first ministerial head to roll in the Westminster sleaze scandal.
The UK Secretary of State for Defence quit after admitting his behaviour had "fallen below the high standards required" in the role and acknowledging that what might have been acceptable in the past was no longer appropriate.
The resignation leaves the UK Prime Minister facing a reshuffle and deprives her of one of her most experienced and trusted colleagues.
The move comes as Scottish Conservative leader Ruth Davidson said there needed to be a "house clearing".
Speaking at a political awards ceremony, Ms Davidson said: "Just because we have a woman in Number 10, at the top of the tree in Plaid Cymru, in the Scottish Conservatives, in the SNP, in the DUP, doesn't mean that sexism and misogyny are somehow resigned to the dustbin of history when it comes to politics.
"Nor, when we look at some of the house clearing that ... needs to happen in the next few weeks, months and years ahead, are we going to say that we didn't need some pretty big shovels for the Augean stable.
"The house clearing that is about to happen needs to happen and we can never go back to where we were before."
Sir Michael's shock announcement came after it emerged he had repeatedly put his hand on a journalist's knee at a dinner in 2002.
His name also appeared on an unverified list of sexual misconduct allegations circulating in Westminster.
In his resignation letter to the Prime Minister, Sir Michael said: "A number of allegations have surfaced about MPs in recent days, including some about my previous conduct.
"Many of these have been false but I accept that in the past I have fallen below the high standards that we require of the armed forces that I have the honour to represent."
Asked whether he was worried that there would be further revelations about his behaviour, Sir Michael told the BBC: "The culture has changed over the years, what might have been acceptable 15, 10 years ago is clearly not acceptable now.
"Parliament now has to look at itself and the Prime Minister has made very clear that conduct needs to be improved and we need to protect the staff of Westminster against any particular allegations of harassment."
The 2002 Tory party conference incident involved radio host Julia Hartley-Brewer, who previously said she regarded it "mildly amusing".
She reacted with shock to Sir Michael's announcement, writing on Twitter "bloody hell" before adding "I doubt my knee was the reason" for his resignation.
When allegations of sexual misconduct first began circulating last week, ministers were warned by Downing Street that "serious action" would be taken by Mrs May where necessary.
Sir Michael's resignation will fuel speculation that other ministers could also be forced out as a result of the scandal.
While Sir Michael has apologised and is not under investigation about the 2002 incident, two of his former ministerial colleagues are the subject of probes.
Cabinet Secretary Sir Jeremy Heywood is looking into claims made against Mrs May's de facto deputy prime minister Damian Green.
The Cabinet Office investigation was launched after activist Kate Maltby, who is three decades younger than the First Secretary of State, told The Times that Mr Green "fleetingly" touched her knee during a meeting in a Waterloo pub in 2015, and a year later sent her a "suggestive" text message after she was pictured wearing a corset in the newspaper.
The department is separately probing whether international trade minister Mark Garnier breached the ministerial code after he reportedly admitted asking his secretary to buy sex toys and calling her "sugar tits".
Ms Davidson said she had discussed the idea of a UK-wide code of conduct for elected officials and political staff with Mrs May.
She told BBC Radio Four's Today programme: "I spoke to the Prime Minister ... at great length about this and what we can do on a UK-wide basis in terms of a code of conduct for all elected officials and those who work for the party too, and we expect both parliaments and parties to move forward from this point.
"The dam has broken on this now, and these male-dominated professions, overwhelmingly male-dominated professions, where the boys' own locker room culture has prevailed, and it's all been a bit bit of a laugh, has got to stop."
Sir Michael's local party said it supports him continuing as MP for Sevenoaks, the seat he has represented since 1997.
Sevenoaks Conservatives chairman Graham Clack told the Press Association: "He's been a fantastic local MP and he will carry on being our fantastic local constituency MP.
"Nothing changes on that."
Education Secretary and Minister for Women and Equalities Justine Greening told BBC Radio Four's Today programme political parties needed to decide what modern standards of behaviour should be.
She said: "There's quite possibly a debate within the public about what those standards should be and there may be different groups of people who think that, actually, standards should be at different levels.
"Some people think that actually we should all expect a bit of this. Perhaps younger people feel that actually this is totally unacceptable. And I think parties are needing to work through what a modern response to this sort of behaviour, and the kind of reports we have seen, should be."
Tory MP Jacob Rees-Mogg told the BBC: "Generally speaking, I think relations between men and women should be on a well mannered, polite basis, and that men have no business going round putting their hands on ladies' knees. I think that is not the way to behave."