Reshuffle leaves Brown even further from the leadership he craves

On the face of it, the departure of David Blunkett is a crushing blow to Tony Blair, especially after the Prime Minister risked his own credibility by strongly backing his fight to remain as Home Secretary.

On the face of it, the departure of David Blunkett is a crushing blow to Tony Blair, especially after the Prime Minister risked his own credibility by strongly backing his fight to remain as Home Secretary.

Mr Blair not only lost a close ally he regarded as an effective minister and who was destined to play a critical role in preparing for the general election expected next May. He also lost a loyal Blairite whose hardline policies at the Home Office sometimes originated in Downing Street.

Charles Clarke, the new Home Secretary, is regarded as a moderniser but his instincts are more liberal than Mr Blunkett's, and he is perhaps more likely than his predecessor to fight his corner against No 10 behind the scenes, as he did when he was Secretary of State for Education.

Mr Blunkett had to apologise to Mr Clarke when he accused him of going "soft" and taking his "foot off the accelerator" at the Department for Education and Skills in his ill-fated interviews for a biography published this week. But that view of Mr Clarke's reign at Education was shared by some Blair advisers. They hope that Ruth Kelly, his successor, will breathe new life into the modernisation programme by giving parents more choice and raising standards further.

In the pre-election period, Mr Blair wants to remind voters that his "education, education, education" mantra has not been abandoned.

One of Mr Blair's unnoticed qualities is his ability to turn setbacks into opportunities. His close allies do not disguise their concern at the loss of Mr Blunkett. But they insist that the unwanted reshuffle has allowed the Prime Minister to achieve two key objectives he might otherwise have missed. Both concern the legacy he leaves to his party.

First, the appointment of David Miliband to the Cabinet Office is a clear statement of intent that Mr Blair wants to fight the election on a radical New Labour manifesto to show he has not run out of steam and ideas. He desperately needs momentum after the election, something that was sadly missing after the 2001 poll.

Otherwise, everyone will be counting the days to his departure because he has said he will not stand for a fourth term. Second, the reshuffle has allowed the Prime Minister to promote a "new generation" of Blairites who, he hopes, will keep the radical flag flying after he leaves Downing Street, and they include Ms Kelly; Mr Miliband; Stephen Twigg, the new Schools Standards minister and James Purnell, a former Blair aide who becomes a whip.

With his promotion, Mr Clarke may emerge as the "stop Brown" candidate in a future Labour leadership election. Although he worked closely with the Chancellor on the child-care measures in last month's pre-Budget report, they have crossed swords in the past, notably over the education department's five-year plan and university tuition fees.

Mr Brown remains the overwhelming favourite to succeed Mr Blair. But it is no coincidence that in the Prime Minister's last two reshuffles he has promoted two of his allies, Alan Milburn and Mr Clarke, who are capable of standing up to the Chancellor, both now and in a leadership contest.

So the fallout from the Blunkett saga may be less helpful for Mr Brown than his backbench allies suspected on Wednesday night, when they saw it as another step down the road to the "post-Blair era". As one Blair ally countered yesterday: "The message from the reshuffle is that Tony still has a lot left in his tank." This could be a bumpy road yet.