Adviser turns the tables in a 'fight for Tony's ear'

Blair's inner circle: The departure of Anji Hunter to BP has allowed her rival Sally Morgan to re-enter Downing Street in an enhanced role

Sally Morgan turned the tables on her old rival Anji Hunter last night by landing the senior Downing Street post that Ms Hunter has just left to join BP.

In a surprise twist to a long-running power struggle inside Tony Blair's inner circle, Baroness Morgan, 42, took over Ms Hunter's role to become director of political and government relations on a salary of almost £120,000 a year.

Ms Hunter, aged 46, announced on Thursday that she was parting company with Mr Blair after 13 years as one of his closest aides to become director of communications at BP for nearly £200,000 a year.

Until June, Lady Morgan was the political secretary at Downing Street and was locked in what colleagues dubbed "the fight for Tony's ear" with Ms Hunter. It appeared that Ms Hunter had seen off her rival when Lady Morgan left Number 10 to become a Cabinet Office minister and was made a life peer. Her brief spell as a minister came to an abrupt end last night when she returned to an enhanced role at Downing Street. Mr Blair's official spokesman admitted that Lady Morgan had never really left, saying she had continued to attend meetings and remained close to the Prime Minister.

Ministerial aides welcomed her formal return last night. One said: "The champagne corks are popping. Sally is very political. We are delighted that someone who has a background on the centre-left has regained a position of influence."

Lady Morgan – a close friend of the Prime Minister's wife, Cherie – was paid £68,283 as a minister. She will continue to advise Mr Blair on equalities issues while overseeing contacts with the political offices of other world leaders, links between Labour and its sister parties abroad and relations with the Scottish, Welsh and Northern Ireland administrations. She will be responsible for the Prime Minister's schedule, external events and correspondence.

Her work at the Cabinet Office, including on women's issues, will be taken over by Barbara Roche. Christopher Leslie, an unpaid junior minister at the Cabinet Office, will now draw a salary.

While Ms Hunter's departure from Tony Blair's side was a wrench, it was only the most high-profile of a series of comings and goings among Downing Street advisers. Two highly trusted private secretaries, John Holmes and more recently John Sawers, have both left, in natural development of their careers, for ambassadorial posts in Lisbon and Cairo. A restructuring of the increasingly important foreign affairs arm of Downing Street has brought in Sir Stephen Wall, the former British ambassador to the EU – and private secretary to John Major – to handle EU affairs, and David Manning, another diplomat and member of the big power contact group on the Balkans, as his adviser on the wider world. Along with Mr Campbell, Mr Powell and Ms Hunter, Mr Manning has been accompanying Mr Blair on his recent missions after 11 September.

In similar evidence of natural turnover, David Miliband, the political high-flier who ran Mr Blair's policy unit in opposition and throughout his first term, has become the MP for South Shields, to be replaced by the equally brainy Andrew Adonis, a former academic and journalist who was for a while in the Social Democratic Party and was responsible for education and constitutional matters in the 1997-2001 policy unit. Robert Hill, the former health specialist in the policy unit, will remain as Mr Blair's political secretary – the job that Baroness Morgan held before the last election.

There has also been further movement at the more nuts-and-bolts end of Mr Blair's inner office, with Kate Garvey, his former diary secretary, moving to another role in Downing Street which includes event planning. The new diary secretary is Katie Kay, who was personal assistant to Lord Birt when he was director-general of the BBC.

In one sense Ms Hunter's departure is similar to that of the much lower profile one of Tim Allan, Mr Campbell's former right-hand man, who also left Downing Street for business. Mr Allan, who now runs his own consultancy, will certainly applaud Ms Hunter's similar decision to make a change in her life from the 24-hour grind of Downing Street while she still has plenty of time. Ms Hunter wanted to leave before the election, and while the post-election restructuring of Downing Street was partly designed to keep her and Mr Campbell fulfilled, she clearly remained restless.

Nevertheless given the reported clashes between Ms Morgan and Ms Hunter when they both worked at Number 10, the ironies will not escape Whitehall watchers. Of the three most powerful women in the central party and government machine, Ms Hunter, Margaret McDonagh and Sally Morgan, it is Baroness Morgan who remains in office – and in power.