Health Secretary Alan Milburn could be poised to take over the reigns at the Department of Education, according to reports.

The Darlington MP would replace Charles Clarke, who has not long been in the job after replacing Estelle Morris.

He is seen as having performed poorly in the recent schools funding crisis, blaming local authorities for the difficulties, rather than addressing them head on.

In turn, Mr Milburn's shoes would be filled by Patricia Hewitt, who is currently Trade Secretary.

Both are committed to Tony Blair's vision of modernising public services through greater use of the private sector and freeing them from Whitehall control.

A cabinet re-shuffle is expected next week after Monday's announcement on the euro, when Gordon Brown will tell MPs his five economic tests have not been met.

Mr Milburn is steering through controversial plans for foundation hospitals and faced down a rebellion by Labour backbenchers.

Like many in New Labour, he has made the passage from the hard-left to arch moderniser. North-East born, he was elected as Darlington MP in 1992.