Gordon Brown backed away from shifting Alistair Darling out of No. 11 today as he shook up his top team - while the resigning minister Caroline Flint berated Gordon Brown for treating her as "female window dressing''.
Mr Brown had seemed determined to make his close ally Ed Balls chancellor, but sources confirmed he will now remain as schools secretary.
Mr Brown was also hit with three more Cabinet resignations.
Firstly, the Defence Secretary John Hutton announced he was stepping down, although he insisted his decision to quit was taken for entirely personal reasons and pledged his support for Mr Brown from the backbenches.
It is understood that he informed the PM around three weeks ago of his intention to leave the Cabinet and to step down from Parliament at the election. It is thought his decision was based on a desire to pursue interests outside politics, rather than any family crisis.
Secondly, it was reported that the Transport Secretary Geoff Hoon had also resigned.
Thirdly, it was announced that the Employment minister Tony McNulty has resigned from the Government in the wake of controversy over his expenses. Mr McNulty has faced criticism for claiming thousands of pounds in expenses against a London property where his parents lived.
Fourthly, the Europe minister Caroline Flint - who was one of the first to go public with criticism of Mr Purnell's resignation - also announced her resignation.
Less than 24 hours after she took to the airwaves to declare her loyalty to Mr Brown amid speculation that she was preparing to resign, she said: "I am extremely disappointed at your failure to have an inclusive Government. You have a two-tier Government - your inner circle and then the remainder of Cabinet.
"I have the greatest respect for the women who have served as full members of Cabinet and for those who attend as and when required. However, few are allowed into your inner circle. Several of the women attending Cabinet - myself included - have been treated by you as little more than female window dressing. I am not willing to attend Cabinet in a peripheral capacity any longer."
Mr Brown said in a Number 10 press conference this evening that local and MEP elections yesterday were "a painful defeat for Labour''. The current political crisis was "a test of everyone's nerves - mine, the government's and the country's''.
Mr Brown insisted he would carry on as Prime Minister, adding: "If I didn't think I was the right person leading the right team ... I would not be standing here.''
The Prime Minister began shuffling his Cabinet pack in the wake of last night's shock resignation as the Work and Pensions Secretary of James Purnell, who urged the premier to quit.
However, the threat to Mr Brown's position appeared to recede as two potential rivals took Government jobs.
Alan Johnson will move from Health Secretary to fill the vacancy left by Jacqui Smith at the Home Office - a department often regarded as a "poison chalice" for ambitious politicians. David Miliband will keep his current job as Foreign Secretary, after reportedly refusing a move.
Chief Secretary to the Treasury Yvette Cooper, Mr Balls' wife, is believed to have scooped a promotion to Work and Pensions Secretary after Mr Purnell's departure.
It is understood Universities Secretary John Denham will take over as Communities Secretary in the wake of Hazel Blears' resignation, and Jack Straw - Mr Brown's loyal "greybeard" - will stay as Justice Secretary.
Lord Mandelson, who has become another key adviser to the PM since returning to government, is to remain as Business Secretary, with an expanded portfolio including responsibility for skills and science.
Sir Alan Sugar has accepted a role as the Government's "enterprise tsar", which will see the business mogul and Apprentice star given a peerage.
The Foreign Secretary David Miliband is expected to remain in his post. He said of Mr Purnell's resignation as Work and Pensions Secretary: "He is obviously a big and serious person and I think it is a loss to Government. However, I don't share the judgment that he made".
Lord Adonis will become Transport Secretary to replace Geoff Hoon.
Sources later confirmed that Bob Ainsworth is to replace Mr Hutton as Defence Secretary, after being promoted from armed forces minister. Culture Secretary Andy Burnham is to become Health Secretary. And Peter Hain is to return to the Cabinet as Welsh Secretary - the job he vacated early last year amid controversy about donations to his campaign for Labour's deputy leadership.
Ed Miliband and Douglas Alexander are understood to be staying as Climate Change Secretary and International Development Secretary respectively.
Glenys Kinnock will move to the Lords to take over from Caroline Flint as Europe minister.
The developments came amid news detailing how badly Labour performed in yesterday's municipal elections. After 27 of 34 councils had declared, Labour had lost 214 councillors overall with the Conservatives gaining 196. The Liberal Democrats were also down, with 15 losses. (European election results are not declared until Sunday evening.) European election results are not declared until Sunday evening.
Mr Purnell gave the PM only moments' notice of his bombshell departure, announced in an open letter published in the media as polls closed in crucial council and European elections.
As he became the fifth minister to resign in three days, the leading Blairite plunged the Government deeper into crisis by saying that Mr Brown's removal was needed to give Labour "a fighting chance" of victory at the general election.
"I now believe that your continued leadership makes a Conservative victory more, not less, likely," he wrote.
"We need to show that we are prepared to fight to be a credible Government and have the courage to offer an alternative future.
"I am therefore calling on you to stand aside to give our Party a fighting chance of winning. As such, I am resigning from Government."
His move was welcomed by backbenchers including Siobhain McDonagh, who was sacked as a whip last year after calling for a leadership election, and Nottingham North MP Graham Allen, who said he hoped Mr Brown would "take the honourable way out so that the party can progress with a leadership election".
Labour backbencher Paul Farrelly said Mr Purnell's actions were "courageous".
"I'm not particularly close to him personally or politically, but I think what he's done is a courageous act, and reluctantly and very sadly his assessment is correct," he told BBC Radio 4 Today programme.
Senior backbencher Barry Sheerman, the respected chairman of a Commons select committee, called for a secret ballot of Labour MPs on Mr Brown's future, which he predicted would result in a majority vote for him to go.
Conservatives demanded an immediate General Election, calling on the Prime Minister to go to Buckingham Palace today to ask for a dissolution of Parliament.
David Cameron said the Government was "falling apart in front of our eyes".
In a statement, Downing Street said Mr Brown was "disappointed" by Mr Purnell's decision but was giving his "undivided attention" to the big challenges facing the country: "How we guide the economy through the downturn and strengthen it for the future; how we push ahead with reform of, and investment in, our public services; and how we renew trust in our democracy and Parliament."
Voices defending the PM and criticising Mr Purnell included Cabinet ministers Jack Straw, Geoff Hoon, Shaun Woodward and Andy Burnham, as well as Cabinet Office minister Liam Byrne and housing minister Margaret Beckett and a host of whips, junior ministers and backbenchers.Reuse content