John Reid is set to be replaced as Secretary of State for Northern Ireland.
Following last night's resignation of British Labour party education minister, Estelle Morris, Dr Reid will take up the post of Labour party chairman, with Charles Clarke assigned the education post.
The reshuffle will see Welsh Secretary Paul Murphy assume responsibility of the Northern Ireland portfolio.
Hardline unionists today welcomed the departure of John Reid.
The DUP's Ian Paisley Junior said: ‘‘I think this is very much a sign that direct rule from Westminster is being firmly bedded in.
‘‘I also suspect it’s a sign that there may not be assembly elections next year.
‘‘I would also think it’s another indication that we have reached the end of the Belfast Agreement.’’
SDLP deputy leader Brid Rodgers welcomed the appointment of Paul Murphy as the new Northern Ireland Secretary.
‘‘He has experience of multi-party talks in Northern Ireland,’’ she observed.
‘‘He understands the situation and that will clearly help the process.’’
Ms Morris resigned last night, frankly admitting she did not feel she had done a good enough job.
And after a series of high-profile rows Ms Morris also admitted she had problems coping with the media.
Tony Blair had urged Ms Morris to reconsider and immediately said he expected her to return to government.