Baroness Warsi has been removed from her role as Conservative Party co-chairman in David Cameron's first major reshuffle of the coalition Government.
Lady Warsi had appealed to the Prime Minister to allow her to carry on in the post but she was widely expected to be moved on.
Her deputy, Michael Fallon, Housing Minister Grant Shapps and Employment Minister Chris Grayling are seen as strong candidates to take over.
The peer used her official ToryChairman Twitter account this morning to confirm she was "signing off", saying it had been "a privilege and an honour to serve my party as co-chairman".
Ken Clarke has agreed to leave his role as Justice Secretary but is likely to remain in the Government, the BBC reported today.
Another minister who appeared to be among the casualties was Cheryl Gillan, who has removed references to her role as Welsh Secretary from her biographical details on Twitter.
The first confirmed appointment of the reshuffle was Andrew Mitchell as the new chief whip - a move confirmed late last night.
Mr Mitchell leaves his post as Secretary of State for International Development to replace Patrick McLoughlin, who is expected to be given a new job, in the key enforcer role for a Tory party that has become increasingly rebellious.
Mr Cameron used his more discreet Commons office rather than No 10 to begin talking to the Government's most senior members last night.
The reshuffle is expected to see ministerial jobs given to a raft of new faces from the 2010 intake as Mr Cameron attempts to build the team he wants around him in the run-up to the next general election.
Former Liberal Democrat Treasury minister David Laws is predicted to make a return to the front benches, while key figures such as Chancellor George Osborne and Foreign Secretary William Hague are widely expected to remain in place.
Mr Cameron praised his new chief whip as "invaluable" to the next phase of the coalition.
He said: "Andrew has done a superb job as Britain's Development Secretary. He has made British development policy transparent, focused and highly effective.
"His energy and passionate commitment have placed Britain at the forefront of international efforts to improve the lives of millions of the world's poorest people. He has made a real difference.
"As chief whip, Andrew will ensure strong support for our radical legislative programme, by working hard to win the argument in the Commons as well as playing a big role in the No 10 team.
"He will be invaluable as the Government embarks on the next, vital phase of its mission to restore our economy to growth and reform our public services."
The new chief whip faces the tricky task of corralling the Conservative party's backbenchers, many of whom have found coalition politics increasingly unpalatable.
Traditionally, freshly elected MPs toe the party line, fearful of upsetting the leadership and ruining their future chances of promotion, but the 2010 Tory intake have been notoriously outspoken and rebellious.
Mr Mitchell said: "It has been a huge privilege to serve as part of a coalition which has radically overhauled the way aid is spent and brought a new rigour to British development policy.
"I am incredibly proud to be part of a Government which is improving the lives of the world's most vulnerable people and helping the poorest countries stand on their own two feet.
"I leave the Department for International Development with great sadness but I very much look forward to the task ahead."
Although both sides of the coalition have lost key cabinet ministers since the Government was formed in May 2010, this is the first major planned overhaul of the administration.
Mr Cameron has always made clear his dislike of past traditions for regular reshuffles but will hope the changes will reinvigorate his government.
This morning's planned Cabinet meeting has been cancelled but could take place later in the day once the new top team has been finalised.
Although Mr Cameron is ultimately responsible for who sits in the Government, under coalition guidelines each party chooses who fills its allocation of posts.
Deputy Prime Minister Nick Clegg is likely to use the opportunity to bring former Treasury chief secretary Mr Laws back in from the cold after he was forced to resign over his parliamentary expenses just weeks after taking office. The MP was suspended from the Commons for seven days last year after a parliamentary inquiry found he had overclaimed expenses.
Aside from Mr Laws, Mr Clegg is expected to leave his government team largely intact.
The reshuffle comes after a difficult six months of internal politics for each party set against a backdrop of national economic doom and gloom. Mr Clegg has been forced to concede defeat on reform of the House of Lords, one of his party's most cherished policies, and has been accused of "bumbling".
Mr Cameron has found himself under repeated fire from disgruntled Tory backbenchers over the way he leads the party, including questions over whether he was "man or mouse".
Mr McLoughlin said his successor would be "a brilliant chief whip" but he had not yet spoken to the Prime Minister about any new job for him within the Government.
He has been linked with the transport secretary role but told Sky News: "I haven't spoken to the Prime Minister today. We'll wait and see."
Mr Clarke was reported to be set to remain in the Cabinet as minister without portfolio - acting as a veteran "wise head".
As Mr Cameron continued discussions with MPs to shape his new team, Downing Street said the new Cabinet would not meet today.
The Prime Minister was reported to have returned to his House of Commons office - seen as a sign that he still has bad news to deliver to some senior party colleagues.
Ken Clarke today denied that being moved from Justice Secretary to minister without portfolio was a humiliation, telling reporters: "Being offered a job in the Cabinet at my age - don't be daft."
Iain Duncan Smith and Michael Gove will keep their jobs in the cabinet, a senior Downing Street source said.
The source said the Work and Pensions Secretary and the Education Secretary were considered "key reformers" by the Prime Minister.
"He wants them to stay in place to get the job done."
The confirmation came amid reports that Mr Duncan Smith had been offered an alternative role - perhaps the Justice brief expected to be vacated by Mr Clarke.
Environment Secretary Caroline Spelman is expected to be ousted from the Cabinet altogether in the shake-up.