Alan Johnson was appointed to the key role of shadow chancellor in Ed Miliband's first shadow cabinet today.
The former home secretary will spearhead Labour's assault on Chancellor George Osborne's spending cuts after Mr Miliband drew back from appointing either Ed Balls or his wife Yvette Cooper.
Both had been widely tipped as possible candidates, with Mr Balls in particular having made no secret of his desire to take on the economic portfolio.
Instead he becomes shadow home secretary while Ms Cooper - who topped the shadow cabinet ballot of Labour MPs - gets shadow foreign secretary.
Despite his long Treasury experience, Mr Balls may have been seen as too independent, having already declared he would re-write former chancellor Alistair Darling's plans to halve the deficit in four years, slowing the pace of cuts.
Mr Miliband may have also feared that he would have used the shadow chancellor's office to establish a rival power base, in an echo of the conflicts which dogged the Blair-Brown years.
Mr Johnson has a genuine popular touch and his appointment will be seen as an olive branch to the supporters of David Miliband, who he backed for the leadership.
In his first statement on taking up the post, he said he would not oppose Government measures "for the sake of it" and would work with Ed Miliband to develop a "real and responsible" alternative to the coalition's plans.
"We are both passionate about a new kind of politics where we will not disagree with our political opponents for the sake of it," he said.
"These are testing times and we will be a responsible opposition acting in the national interest. Ed and I will work together to build a plan for growth and for jobs in our economy.
"We will offer a real and responsible alternative to the dangerous plans of this coalition Government which is damaging the economic future of millions of families."
Transport Secretary Philip Hammond however dismissed him as a "caretaker appointment".
"Ed Miliband said that he wanted to move on to a new generation of Labour politicians - but Alan Johnson frankly is from the last generation of Labour politicians," he said.
"His economic policy is a bit of an unknown for us, I have to say, and his track record on taking tough decisions is not a great one."
Mr Balls said that he was "surprised but pleased" to have been given the home affairs brief and sought to play down suggestions that he was disappointed not to get shadow chancellor.
"Obviously the economic argument has been very important to me - that is why I stood for leader of the Labour Party. But to me it's never been about the job you are doing and the particular personality, it is about winning the argument," he said.
"Ed Miliband and Alan Johnson and a unified cabinet now have to make sure that we win that argument. For me, this home affairs brief is very important."
In other key appointments, defeated leadership contender Andy Burnham becomes shadow education secretary and election co-ordinator while John Healey - who came a surprise second in the shadow cabinet ballot - takes on health.
There a big jobs for two of David Miliband's lieutenants in the leadership contest - Douglas Alexander and Jim Murphy - who will tackle work and pensions, and defence respectively.
Ed Miliband's own campaign manager, Sadiq Khan, is rewarded with the plum post of shadow lord chancellor and justice secretary, and will shadow Deputy Prime Minister Nick Clegg's political and constitutional reform programme.
Deputy leader Harriet Harman will also take on the international development portfolio.
Mr Miliband said that he was that he was "delighted" with his new team, which was drawn from "a broad range of talents across our party".
"Together this new generation of Labour will work together to reject the pessimism of this coalition Government as we set out our vision of what Britain can achieve."
Other appointments were John Denham to business, innovation and skills; Caroline Flint communities and local government; Meg Hillier energy and climate change; Maria Eagle transport; Mary Creagh environment; Ann McKechin Scotland; Ivan Lewis culture, media and sport; Tessa Jowell Olympics, Liam Byrne Cabinet Office; Hilary Benn shadow leader of the Commons; and Angela Eagle shadow treasury chief secretary.
Peter Hain and Shaun Woodward, who both failed to secure election to the shadow cabinet, nevertheless carry on shadowing Wales and Northern Ireland respectively, as discretionary appointments of the leader.
Mr Johnson said tonight that he would take Mr Darling's plan for tackling the deficit as his "starting point", rejecting Mr Balls' argument that it was cutting too quickly.
"I have never agreed that Alistair's proposals were over too short a period. I think he got it just about right but nothing is preserved in aspic and we need to look at all this again," he told Sky News.
"There have been developments since the General Election. We need to take all those into account."
FULL LIST OF SHADOW CABINET APPOINTMENTS
Leader of the Opposition: Ed Miliband
Deputy leader and shadow secretary of state for international development: Harriet Harman
Shadow chancellor of the Exchequer: Alan Johnson
Shadow secretary of state for foreign and Commonwealth affairs and minister for women and equalities: Yvette Cooper
Shadow secretary of state for the home department: Ed Balls
Chief whip: Rosie Winterton
Shadow secretary of state for education and election coordinator: Andy Burnham
Shadow lord chancellor, secretary of state for justice (with responsibility for political and constitutional reform): Sadiq Khan
Shadow secretary of state for work and pensions: Douglas Alexander
Shadow secretary of state for business, innovation and skills: John Denham
Shadow secretary of state for health: John Healey
Shadow secretary of state for communities and local government: Caroline Flint
Shadow secretary of state for defence: Jim Murphy
Shadow secretary of state for energy and climate change: Meg Hillier
Shadow leader of the House of Commons: Hilary Benn
Shadow secretary of state for transport: Maria Eagle
Shadow secretary of state for environment, food and rural affairs: Mary Creagh
Shadow chief secretary to the Treasury: Angela Eagle
Shadow secretary of state for Northern Ireland: Shaun Woodward
Shadow secretary of state for Scotland: Ann McKechin
Shadow secretary of state for Wales: Peter Hain
Shadow secretary of state for culture, media and sport: Ivan Lewis
Shadow leader of the House of Lords: Baroness Royall of Blaisdon
Shadow minister for the Olympics: Tessa Jowell
Shadow minister for the Cabinet Office: Liam Byrne
Lords chief whip: Lord Bassam of Brighton
Shadow attorney-general: Baroness Scotland
Also attending shadow cabinet meetings:
Shadow minister of state for the Cabinet Office: Jon TrickettReuse content