THE Prime Minister yesterday sacked home secretary Charles Clarke as he carried out a ruthless Cabinet reshuffle after Labour's pounding in Thursday's local elections.

By Graham Dines

THE Prime Minister yesterday sacked home secretary Charles Clarke as he carried out a ruthless Cabinet reshuffle after Labour's pounding in Thursday's local elections.

With Labour losing hundreds of councillors across England - most of them to a rejuvenated Conservative Party which had its best set of election results since 1992 - Mr Blair moved defence secretary John Reid to the Home Office to sort out the mess of foreign prisoners being released into society rather than being deported after serving their sentences.

Mr Clarke paid a heavy price for the prisoners debacle, which highlighted Government policy failures over law, order, asylum and immigration.

It is believed the dozen or so seats gained by the far right British National Party were on the back of a perceived bias against working class white people in areas of large immigrant populations.

Mr Blair demoted foreign secretary Jack Straw to the position of leader of the House of Commons, moving environment and rural affairs secretary Margaret Beckett to become the first woman holder of the post.

Deputy Prime Minister John Prescott - ridiculed after lurid details were published of his two year affair with one of his diary secretaries - loses responsibility for a Whitehall department but remains in the Cabinet to act as a catalyst for Labour's revival plans.

David Miliband also moves from the Office of the Deputy Prime Minister, which will be given a new name, with Ruth Kelly leaving the education department to become secretary of state for communities and local government, one of the key elements of the ODPM.

However, under fire Patricia Hewitt - who last week was booed off stage by nurses after claiming the National Health Service had just had “its best year ever” - remains as health secretary.

She has impressed Mr Blair with her zeal in driving forward reform in the NHS, even though this has led to major cuts in services - including the closure of a number of hospitals in Suffolk - as she has refused to pour more cash into NHS and primary care trusts which are millions of pounds in the red.

Chief whip Hilary Armstrong is moved into the new post of social exclusion minister, retaining Cabinet status as the chancellor of the Duchy of Lancaster.

John Reid's post of defence secretary goes to Des Brown, an ally of Gordon Brown who was previously chief secretary to the treasury.

Home Office minister Hazel Blears becomes Labour party chair and minister without portfolio, Alan Johnson goes to education, and Alistair Darling has been sacked as transport secretary and Scottish secretary, replaced by Douglas Alexander.

Mr Blair moved swiftly after Labour's poor showing in elections contested in 176 local authorities in England.

The party lost ground, especially in London, the midlands, and the south. Among councils changing hands were Coventry and the London boroughs of Bexley, Ealing, and Hammersmith & Fulham.

In Ipswich, Labour lost three seats to the Tories and two to the Lib Dems. For the first time since 1978, the Tories have more seats than Labour in the borough, and the council will remain a joint administration of the Conservatives and Liberal Democrats.

The Tories also picked up a number of seats in Waveney, but just failed in their ambition to gain outright control of Colchester. In Brentwood, the Tories gained six seats in the constituency of their local government spokesman Eric Pickles.

Chancellor Gordon Brown issued a blunt warning in the wake of the defeats and two of the worst weeks of Mr Blair's premiership that the Government needed change.

He said the election results had been a “warning shot” from the voters to the party. He highlighted the crisis over the Home Office's failure to consider hundreds of foreign prisoners for deportation, which, he said, had raised legitimate concerns about security among the public.