Tony Blair is expected to remove Ian McCartney as Labour chairman when he reshuffles his Cabinet this week in an attempt to beef up the party machine ahead of the general election.
The Prime Minister has offered the post of chairman to Alan Milburn, the former health secretary, who quit the Cabinet last year to spend more time with his family. Mr Milburn is considering whether he wants to return so quickly to frontline politics.
Mr McCartney is likely to move to another cabinet post. He is a popular figure with Labour activists but his performance has been criticised by Blairites, and the Prime Minister wants a new, media-friendly "front man" for his campaign to win a third term. If Mr Milburn declines the chairman's post, it is expected to go to another Labour figure not currently in the Cabinet.
Limited changes are expected at cabinet level, although some members will switch to new jobs.
A bigger shake-up is predicted in the lower ranks, with rising stars promoted to middle-ranking minister of state level in a sign they could win promotion to the Cabinet after the election pencilled in for May.
After surviving his "wobble" about whether to lead the party into the election, Mr Blair is determined to use the reshuffle to reassert his authority and create a stronger team for the election. But the appointment of Mr Milburn could create tensions with Gordon Brown, the Chancellor, who is in charge of election strategy and clashed with him over health reforms when he was in the Cabinet.
Blairites hope Mr Milburn will be persuaded to make what would be a surprisingly swift return after 14 months. They say the chairmanship would not be as time-consuming as running a big Whitehall department.
John Reid, his successor as Health Secretary, said yesterday that he had been missed. He told Sky News: "If you ask me whether we miss people of the talent of Alan Milburn, yes, by God we do."Reuse content