Sajid Javid has resigned as Chancellor, derailing Boris Johnson's cabinet reshuffle in an apparent turf war with the Prime Minister's top adviser, Dominic Cummings.
Reports suggest Mr Javid, who had been on course to keep his job after being summoned to Number 10, resigned after being asked to sack all his special advisers.
The Chancellor had a turbulent relationship with Mr Cummings, who has sought to exert total control over government special advisers, over decisions around spending as well as his management of Whitehall aides.
It comes with less than a month until the Budget. He will be replaced by Rishi Sunak, with 10 and 11 Downing Street set to share a team of special advisers in a major shakeup at the heart of government. Mr Sunak, the first Hindu in cabinet, has only been an MP since 2015.
Last year saw a furious row between 10 and 11 Downing Street after Mr Cummings sacked Sonia Khan, Mr Javid's media adviser, over her contact with individuals close to the former Chancellor Philip Hammond. The Chancellor had not been informed about the sacking, which saw Ms Khan escorted from Downing Street by police.
Shadow Chancellor John McDonnell said: “This must be a historical record with the government in crisis after just over two months in power. Dominic Cummings has clearly won the battle to take absolute control of the Treasury and install his stooge as Chancellor.”
SNP Westminster leader Ian Blackford claimed Mr Johnson had "lost control".
"Rather than prioritising the interests of people across the country, he is embroiled in an ego battle between his de-facto deputy Dominic Cummings and his former Cabinet ministers," Mr Blackford said.
The other great offices of state have remained the same, with Dominic Raab returning as Foreign Secretary and Priti Patel continuing as Home Secretary. Michael Gove also retains his post as Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office.
Alok Sharma has been appointed as Business Secretary, and will also be the lead minister for the COP26 climate conference in Glasgow later this year.