David Cameron set to reshuffle Cabinet

The Prime Minister will seek to reassert his authority over his restive Conservative Party with his first Cabinet re-shuffle since the coalition took office in 2010. (Getty Images)

David Cameron will this week attempt to reclaim the political initiative as MPs return to Westminster after a bruising summer marked by an outbreak of internal dissent over his leadership.

The Prime Minister will seek to reassert his authority over his restive Conservative Party with his first Cabinet re-shuffle since the coalition took office in 2010.

At the same time ministers are preparing a series of high-profile announcements intended to inject new life into the moribund economy and pull the country out of recession.

Mr Cameron used an article for a Sunday newspaper to declare his determination to end the "paralysis" and "cut through the dither" that was holding the country back.

His comments were seen as a riposte to Tories like London Mayor Boris Johnson who accused him of "pussyfooting around" and Tim Yeo who questioned whether he was "man or mouse".

However he faces an immediate challenge from the Tory right, with David Davis - who fought him for the party leadership in 2005 - setting out his alternative strategy for growth.

Before proceedings in the Commons have even started today, Mr Davis will use a lunchtime speech to the Centre for Policy Studies think-tank to call for a radical programme of cuts to taxes, regulation and public spending to kick-start the economy.

Chancellor George Osborne made clear at the weekend that he was sticking to his economic guns, insisting - in an echo of Margaret Thatcher - that "there is no alternative" that offers an easy way out of the current difficulties.

He sought, however, to revive party morale with the promise of new Bills to allow the Government to use its balance sheet to underwrite new construction projects and to speed up the planning process in an attempt to boost new development.

However, even that is likely to prove controversial with some Tories, as well as their Liberal Democrat coalition partners, after he suggested existing rules could be used to allow building on Green Belt land if an equivalent area of land elsewhere was brought into the Green Belt.

Meanwhile, Mr Cameron's party management skills will be put to the test as he seeks to re-boot his Government with a reshuffle of his top team.

Many of the most senior figures are expected to remain in their present posts - including Chancellor George Osborne, Foreign Secretary William Hague, Home Secretary Theresa May, Education Secretary Micheal Gove, Work and Pensions Secretary Iain Duncan Smith and Defence Secretary Philip Hammond - leaving limited room for manoeuvre.

Much attention has focused on the key role of Conservative Party Chairman. Baroness Warsi has publicly appealed to Mr Cameron to allow her to carry on in the post, but some Tory MPs want to see her replaced with a big hitter who can galvanise support for the party.

Employment Minister Chris Grayling and Housing Minister Grant Shapps have been touted as possible alternatives from outside the Cabinet.

Mr Cameron may carry out a more far-reaching shuffle when he comes to the middle and lower ministerial ranks, taking the opportunity to get rid of under-performers and to blood new talent from the the 2010 intake of new MPs.

The reshuffle could also give Deputy Prime Minister Nick Clegg the opportunity to bring former treasury chief secretary David Laws back in from the cold after he was forced to resign over his parliamentary expenses just weeks after taking office.

The Lib Dem leader has also endured a difficult summer. Business Secretary Vince Cable was forced to come out at the weekend to defend him after some in the party began calling for him to replace Mr Clegg as leader.

There were claims that Mr Cable was "on manoeuvres" after his close ally, Lord Oakeshott of Seagrove Bay, warned the party may need a change of "management and strategy" if it was to stand any chance at the next general election.

Labour MP John Mann said Mr Laws should not be brought back into the Government until the voters have had a chance to pass judgment on him in an election.

Mr Mann argued that any MP caught up in scandal should have to face the electorate before being considered for a return to Government office. He cited the case of Tory former minister Cecil Parkinson, who resigned from Margaret Thatcher's government in 1983 and did not return to the Cabinet until after the 1987 election.

Mr Laws was suspended from the Commons for seven days last year after a parliamentary inquiry found he had overclaimed expenses.

Mr Mann said: "There is no moral or ethical difference between David Laws or those MPs who went to prison. Parliament has had its say on David Laws and the voters are also entitled to their say.

"Like Cecil Parkinson, David Laws should face the jury of the British people at the ballot box before re-entering Government. There is a fundamental principle of British democracy at stake in this issue. Mrs Thatcher upheld her principles and David Cameron should do the same."

Mr Cameron's official spokesman refused to comment today on the timing or content of the expected reshuffle.

But he confirmed that the regular weekly meeting of Cabinet will take place tomorrow morning at the usual time.

This sparked some speculation among Westminster observers that any Cabinet-level changes could take place later today, to allow the new team to be in place in time for tomorrow's meeting.

Downing Street also released a schedule of ministerial engagements over the coming week, which include events for some of those who have been tipped for the chop, including Justice Secretary Kenneth Clarke.

PA