Gordon Brown will create a powerful group of ministers and officials to lead the Government's response to the global financial crisis as part of a cabinet reshuffle to be announced today.
Ed Miliband, the Cabinet Office minister and a close Brown ally, is being considered for a key role on the new economic crisis committee. Liam Byrne, the Home Office minister, is expected to win promotion to the Cabinet. The Blairite former management consultant has impressed the Prime Minister in his handling of immigration while at the Home Office.
Ruth Kelly will step down as Transport Secretary today, and she also said last night that she would stand down as MP for Bolton West at the next election. She told Mr Brown in May she wanted to spend more time with her family but the news leaked out during last week's Labour Party conference.
Aides said Mr Brown has not made a final decision on the changes. One option is to strengthen the Cabinet Office by appointing Mr Byrne as an "enforcer" to monitor the performance of government departments. Mr Brown wants to sharpen up policy delivery across Whitehall. He believes the global financial crisis has shown the need for an inner economic group to identify ailing banks and respond quickly to fast-moving events. It is being compared to the "Cobra" unit which meets at times of emergencies such as terrorist threats and floods.
A wider cabinet shake-up is expected next year but today's reshuffle will be limited in scope, with aides saying Mr Brown has been focused on economic problems. The holders of the top jobs of Chancellor, Home Secretary and Foreign Secretary will stay in their posts.
Ministers outside the Cabinet who are expected to leave the Government include the Trade minister, Lord Jones of Birmingham, and the Environment minister, Lord Rooker.
Lord Jones, who refused to join the Labour Party when he became a minister, said yesterday: "I said when I took the job 15 months ago, I'd do it for the country, for the Government, for my Prime Minister... It's not a comment on him – I think his leadership is very, very good indeed."
The threat to Mr Brown's position has receded after his speech to the Labour conference and a bounce in the opinion polls, and because his critics do not think it would be right to move against him while he is handling a global crisis. Brown allies are confident that today's limited reshuffle will not trigger a revolt by his critics.
But tensions remain beneath the surface. Yesterday, Andy Burnham, the Culture Secretary, refused to criticise the rebel Labour backbenchers calling for Mr Brown to face a leadership challenge. He told The Monitor magazine: "My view of colleagues calling for a leadership contest is that people are entitled to come to their own conclusions and voice them. That's democracy and that's right and healthy."