The new Foreign Secretary, Philip Hammond, is an arch-Eurosceptic who has said he could support Britain pulling out of the 28-member bloc.
His promotion will delight Tory right-wingers who had accused William Hague of “going native” during his four years of dealings with the European Union.
Mr Hammond is regarded as long-shot candidate for the Tory leadership and has been tipped for a job swap with Chancellor George Osborne if the party wins the general election in May 2015.
Last year he burnished his Eurosceptic credentials by saying he would vote for a British exit if a referendum was held tomorrow. But he stressed that David Cameron should first be given the opportunity to try to wrest powers back from Brussels.
Now Mr Hammond will play a central role in talks within the EU over the future terms of British membership.
He played down suggestions yesterday that he would adopt a stridently Eurosceptic approach to the discussions.
“I don’t think the way to enter a negotiation is to start issuing threats. The way to enter a negotiation is to look for the areas where we do agree,” he said.
“There are many issues where Britain is not isolated, where there are other members of the EU that also understand the need for reform, particular the need for reform to allow the eurozone and the non-eurozone part of Europe to be able to work together.
“So I am going to go into these discussions with the PM and the Chancellor in a very positive mindset and I believe it will be possible to renegotiate significant change to the way the EU works.”
While Mr Hammond has a low profile outside Westminster, he has enjoyed a smooth ride through Tory ranks because of his reputation as a “safe pair of hands”.
He is now in his third Cabinet post following stints as Transport Secretary and Defence Secretary, where he was dispatched in haste after Liam Fox’s resignation.
In opposition Mr Hammond impressed both Mr Cameron and Mr Osborne with his performance as the shadow Chief Secretary to the Treasury.
He had been expected to take the role of implementing the Chancellor’s austerity measures in government, but the post of Chief Secretary to the Treasury went to the Liberal Democrats.
It has been speculated Mr Hammond could move to the Treasury in a future Tory administration, with Mr Osborne heading in the opposite direction to the Foreign Office.