Cabinet return for Blunkett as Blair looks to his allies

Tony Blair will try to stamp his authority on his Government at the start of his third term by promoting New Labour allies in an immediate cabinet reshuffle today.

David Blunkett, who resigned as Home Secretary in December last year amid turmoil in his private life, is earmarked for a swift comeback as the Cabinet's "enforcer" and progress-chaser with a brief to drive through the public service reforms outlined in the Labour manifesto.

Others tipped for promotion to the Cabinet include three Blairites: David Miliband, a Cabinet Office minister, who may become Chief Secretary to the Treasury; Hazel Blears, a Home Office minister, and John Hutton, a Health minister. Those leaving the Cabinet are expected to include Geoff Hoon, the Defence Secretary, and Paul Boateng, the Chief Secretary to the Treasury.

Mr Blunkett is expected to be based in the Cabinet Office and may take the title of Chancellor of the Duchy of Lancaster held by Alan Milburn, Labour's policy and election co-ordinator. He will chair some important cabinet committees.

The Cabinet Office will work more closely with Downing Street in a move that will come close to creating a "Prime Minister's Department".

Mr Blunkett may take over responsibility for local government, including a review of the council tax, from John Prescott's Office of the Deputy Prime Minister, which is regarded as "dysfunctional" by Whitehall officials. Its remit also includes housing, planning, inner-city regeneration, social exclusion and the fire service. But Mr Blair is thought to be reluctant to dismantle the empire of Mr Prescott, a loyal ally.

Those expected to rise up the junior ministerial ranks include two former Blair aides, James Purnell, recently made a government whip, and Pat McFadden, a former Downing Street director of political operations, who was expected to become MP for Wolverhampton South East.

The Prime Minister wants to avoid an early conflict with Gordon Brown after the two men reforged a strong partnership during the election. So he may also promote Brownites including Douglas Alexander, a Foreign Office minister, and Yvette Cooper, a minister in Mr Prescott's department.

Blair allies hope the reshuffle will not be seen through a "Blair-Brown prism" and will portray it as an attempt to preserve the unity between the two camps during the election despite tensions between them before that. However, Blair aides are trying to scotch the idea that Mr Brown rescued an ailing Labour campaign led by a weakened Prime Minister. Labour's private polls show that Mr Blair's personal ratings improved significantly during the campaign, and allies insist he emerged from it stronger rather than weaker. While Blair allies acknowledge Mr Brown's central role in the campaign, one said yesterday: "The message will be that it was New Labour that won it."

The Prime Minister plans to "hit the ground running" by announcing some of the flagship Bills to be included in the Queen's Speech on 17 May. A long list of about 40 Bills has been drawn up by Peter Hain, the Leader of the Commons.