Beleaguered Alex Salmond sacks Fiona Hyslop, his weakest link

• Alex Salmond gave in to growing pressure over under-fire minister Fiona Hyslop. Picture: PA

In a dramatic day in parliament, Fiona Hyslop was demoted from the Scottish Cabinet to the post of minister responsible for external affairs and culture, after it became clear she would lose a vote of no confidence from MSPs.

Replacing her is Mike Russell, who until yesterday was responsible for Ms Hyslop's new portfolio and for leading the SNP's charge for a referendum on independence next year.

Mr Salmond will personally take responsibility for reviving the referendum bill – his government's top priority – which opponents have made clear they will vote down at the first opportunity next year.

The decision to demote Ms Hyslop comes after months of speculation about her future.

But it is the manner of her departure that has led to claims that the balance of power is shifting in Holyrood.

Read analysis by Professor John Curtice here

The Scotsman has learned that when SNP figures were told of the planned no-confidence vote in Ms Hyslop – led by the Liberal Democrats – they threatened to resign en masse and force an election.

Although this is a tactic the SNP administration has used regularly and effectively before, it became clear on Monday that opposition parties were in a confident enough mood to dismiss the threat.

And the First Minister seemed to be unwilling to sacrifice the keys of Bute House for Ms Hyslop's career.

The drama began to unfold last Saturday morning when Scottish Liberal Democrat leader Tavish Scott notified the SNP that his party would use its debating time tomorrow morning to table a motion of no confidence in Ms Hyslop. Negotiations over the weekend showed that Labour was willing to back the motion and, by doing so, step in as a government should the SNP resign.

The Conservatives, who several weeks ago called for Ms Hyslop to resign, made it clear they would abstain.

Yesterday morning, an SNP offer to the Tories of a deal was turned down, before the Nationalists could even elaborate what they would put on the table to save their minister.

The Tories had previously branded Ms Hyslop "the weakest link" partly because most of the SNP manifesto promises that have not been delivered, including class sizes and paying off student debt, were in her portfolio.

Shortly after the Tory snub, a Scottish Government press release was issued announcing the reshuffle.

A delighted Mr Scott headed to the Scottish Parliament media tower to take credit for the first major ministerial scalp since the SNP came to power in 2007.

He said the "last straw" had been Ms Hyslop's threat last week to take control of education from Scotland's councils.

That threat came after figures revealed a drop of 2,000 in the number of teachers in Scotland since the SNP took power. They also showed that class sizes for P1 to P3 were beginning to increase, on average, despite an SNP promise to reduce them.

Mr Scott claimed Ms Hyslop's statement was "completely unreasonable" because the SNP had drawn up a concordat with councils to give them flexibility on spending, which had led to the poor figures on Friday.

The threat had provoked a furious response from councils, many of which are run by administrations involving the SNP.

Mr Scott went on: "There is a growing crisis in Scottish education that can only be addressed with a fresh education secretary."

Labour also tried to take credit for the demise of Ms Hyslop, who will have to take a pay cut of almost 16,000.

The party's Scottish leader Iain Gray quickly followed Mr Scott in briefing journalists, and he pointed out he had called for Ms Hyslop to be sacked only last Thursday at First Minister's Questions.

He said the reshuffle and "lack of bite" in the SNP's resignation threats showed that "the balance of power is shifting as the wheels come off the SNP bandwagon".

He argued other recent events had contributed to a loss of confidence by Mr Salmond. They included defeat for the SNP in the Glasgow North East by-election; opinion polls that put the Nationalists behind Labour in Westminster and Holyrood voting intentions; and the realisation that key policies such as an independence referendum and minimum pricing for alcohol were doomed.

Mr Gray went on: "Alex Salmond has listened to Labour and finally fired his hapless minister, but her removal actually poses new questions.

"He needs to ensure that the SNP starts to build schools and he needs to start recruiting teachers.

"Fiona Hyslop has finally paid the price for the SNP's failure in education and the schools crisis, but the buck stops with the First Minister."

He also claimed that Mr Russell was being "kicked upstairs" for failing to persuade other parties to support the referendum, suggesting that, in effect, the reshuffle was a "double sacking".

But this was dismissed by the SNP, with sources close to the First Minister also warning that the threat of removing education from councils and "nationalising" the sector had not disappeared along with Ms Hyslop.

Last night, an unrepentant Ms Hyslop repeated her criticism of local authorities.

She said: "As we set out as a government on Friday, we have to recognise that there's been a failure by local government in many respects. I think it's right at this time that we reappraise that, and having a new minister to do that is the right thing to do."

Mr Salmond said: "Schools policy has reached a difficult period, with our disagreement with many local authorities about their failure to reduce class sizes by sustaining teacher numbers.

"It is appropriate that a fresh look is taken at this and other schooling issues to break the impasse for the benefit of parents, teachers and children."

Ten days that shook Alex Salmond's world

Sunday, 22 November: A sign of things to come when pro-Nationalist blogger Bruce Newlands is investigated by his employer, Robert Gordon University, for his online comments.

Monday, 23 November: YouGov poll for the Daily Telegraph shows that support for independence has fallen to its lowest level since the SNP won power in 2007. Just 29 per cent wanted separation compared to 57 per cent who did not.

It also showed that Scots were split over whether there should be a referendum in the next two or three years – 45 per cent said Yes, 47 per cent said No.

Wednesday, 25 November: SNP looks forced to the fringes when the UK government publishes its white paper backing the Calman proposals for more powers for Holyrood. The Calman recommendations are also given cautious support by the Conservatives, although they call for their own white paper on the constitution.

SNP's concordat with local government begins to unravel as councils object to plan that would see them allowed to borrow 10 million to help 500 older teachers to retire and free up positions for newly trained staff. Ministers also under fire for going soft on crime by discouraging short-term sentences and extending fixed penalty notices.

Thursday, 26 November: News breaks that Labour is not going to support SNP's last remaining flagship policy to introduce minimum pricing of alcohol – consigning it to parliamentary dustbin.

Friday, 27 November: Education secretary Fiona Hyslop infuriates councils by suggesting that control of state schools could be wrested from them and transferred to government after official figures reveal falling teacher numbers and failure to meet class size pledges.

Saturday, 28 November: Scottish Liberal Democrats begin discussing motion of no confidence in Ms Hyslop.

Sunday, 29 November: SNP caught up in a dirty tricks scandal when an aide to the constitution minister Mike Russell discovered running an abusive blog. Mark MacLachlan resigns as Mr Russell's office manager for making false allegations about political opponents' private lives.

Monday, 30 November: Alex Salmond launches his Referendum white paper on St Andrew's Day. But it is not supported by any of the other main parties and is criticised for lack of detail.

Meanwhile, the SNP approaches the Tories, asking for deal to save Ms Hyslop from no confidence motion. They refuse.

Tuesday, 1 December: Mr Salmond gives in to pressure from opposition and finally dumps Ms Hyslop as education secretary, replacing her with Mike Russell.