Shake-up gives Blair tight grip on Government

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Tony Blair's shake-up of the Whitehall machine will give him the tightest grip on the levers of Government of any Prime Minister in history.

He has created a vastly beefed-up Cabinet Office, which will work in conjunction with Downing Street to force through reform across the main departments.

The concentration of power in the hands of trusted lieutenants ­ both elected and unelected ­ will raise concerns that individual ministers' freedom of movement is being constrained. But Mr Blair, knowing that time is running out to produce the tangible improvements voters expect, believes an iron discipline is required across the entire Government.

Anji Hunter, a friend of Mr Blair since they were students at Oxford together and his special assistant over the past four years, has been handed a pivotal role in ensuring that Downing Street keeps a grip on the sprawling Whitehall machine. Promoted to a new post as head of government relations, she will take charge of liaising with other departments to ensure ministers are all focusing on the same targets. She will keep a close eye on their individual performances, eventually making recommendations for promotions and dismissals.

Ms Hunter will work as a back-up to John Prescott, the Deputy Prime Minister, who will head a Cabinet Office team concentrating on improving delivery of policies. Among ministers backing him up are Lord Macdonald of Tradeston and the newly ennobled Sally Morgan, who was previously Mr Blair's political secretary.

A similar co-ordination role is being taken by Charles Clarke, promoted to the Cabinet as Chancellor of the Duchy of Lancaster with the job of bringing closer the government and Labour machines.

Mr Blair's closest political confidant, Alastair Campbell, is retreating into the shadows, swapping his position as chief press secretary for a new, enhanced role as director of communications and strategy. His remit will take him way beyond Downing Street's confines, with responsibility for ways of communicating overall government policy. Meanwhile, Jonathan Powell, Mr Blair's chief of staff, and Jeremy Heywood, his principal private secretary, will retain charge of the smooth day-to-day running of Downing Street.

The first political storm since the election rumbled on yesterday, with senior ministers defending their hefty salary increases. John Reid, the Secretary of State for Northern Ireland, said that by forgoing their full pay over the past four years ministers had saved the taxpayer £2.5m.

Last night, Downing Street revealed its full list of the Government's new whips. Hilary Armstrong, as Chief Whip, leads the Commons, with Keith Hill as her deputy. The other Commons whips are Thomas McAvoy, Gerry Sutcliffe, Anne McGuire, John Heppell, Nick Ainger, Tony McNulty and Graham Stringer.

Lord Carter is Chief Whip in the Lords, backed up by his deputy Lord McIntosh.