Labour panic after civil war sees No10 chief Sue Gray forced out - with grim poll showing Brits ALREADY think government is sleazy just three months in

Keir Starmer was warned he must get a grip on his panicking government today after Sue Grays extraordinary exit.

The PM has been forced to conduct his first reset after barely three months in power, replacing his chief of staff and drafting in a new comms team.  

Morgan McSweeney is now in the top job at No10, sealing his victory in an apparent power struggle with former civil servant Ms Gray.

But even allies are acknowledging that Sir Keir must do better after a post-election honeymoon cut short by the winter fuel allowance furore, freebies scandal and a Downing Street civil war. A grim poll this morning suggested six in 10 Brits already view the Labour administration as sleazy.

The looming Budget is set to be a critical moment as the Chancellor desperately hunts for ways of hiking taxes. 

Former minister Baroness Harman said Sir Keir would be frustrated after missteps and clunkiness blighted his transition to power.

Ex-No10 spin chief Alastair Campbell said the premier must recognise that government is harder than Opposition and narrate a very clear strategy. 

And John McTernan, Tony Blairs former political secretary, said the Government was drifting. 

Touring broadcast studios this morning ahead of Parliament returning from the conference recess, Defence Secretary John Healey paid tribute to Ms Grays contribution.

However, he said her decision to step aside meant the Governments case could be set out more clearly. 

Sir Keir Starmer has replaced Sue Gray with his campaign supremo Morgan McSweeney as his Chief of Staff 

Following her resignation, Ms Gray now becomes the Prime Ministers envoy for the regions and nations, and is expected to take a pay cut from her former salary of £170,000

Sir Keirs new Chief of Staff Mr McSweeney arriving for his first day in the new role

A grim poll this morning suggested six in 10 Brits already view the Labour administration as sleazy

Mr Healey praised Ms Grays massive role in helping it prepare for office but I really respect her decision to step aside.

Im glad shes still going to be working with us, he told Times Radio.

Asked whether he would have accused the Tories of being a total shambles if their chief of staff had stood down within three months in office, Mr Healey said: In the end what counts for people is what government does. Were getting on with the job people elected us (to do).

Mr Healey said Sir Keir was leading the most unified Cabinet that Ive ever served in.

He told BBC Breakfast: Ive sat at the Cabinet table before, Ive sat in every shadow cabinet since Labour lost in 2010, and this is the most unified Cabinet that Ive ever served in.

Mr McSweeney has a strong track record and was at the heart of what was an historic election win for the party, the minister said.

Challenged that the government already seemed to be at crisis point, Mr Healey told LBC: No, Id characterise this as a new Government getting on with the job.

He refused to be drawn on whether Ms Grays new role as envoy to the regions and nations was salaried or whether she would be elevated to the House of Lords, saying: None of those are decisions for me.

Asked what had gone wrong, Mr McTernan told Times Radio: The Government has completely lost grip, I think, a grip on their operations, a grip on the media grid and they dont dominate communications and that has been because they have lacked a political narrative and the political drive and the momentum that drove them through the election to a great victory.

That seemed to run out after the sitting weeks ended in July and we got into the recess of August. It just went from the country demanding change to a Government delivering drift.

Lady Harman told the BBCs Westminster Hour that she wished well for Ms Gray.

I dont know whats actually happened to cause the problems thats led to this reshuffle… the most important thing is to get the team right so they can actually get on with delivering those key missions that Keir Starmer got into government to do, she said.

The important thing now is that there should be stability… there has been a squall, its been a bit of a buffeting but the important thing is to move on past it. Nobody really wants the news to be led on this.

Lady Harman denied that the government had gone badly wrong.

But she said: I dont think its how we would have wished to start off… its often the case if youve been out of power for a long time and you get in, there are missteps there are clunkiness.

The point is to get things sorted out to batten down the hatches and get things moving forward. Im sure Keir has been incredibly frustrated by this.

Mr McSweeney has already been credited with transforming the Labour Party into an election-winning machine after the Corbyn era.

Having been director of centrist think-tank Labour Together, he ran Sir Keirs successful leadership campaign in 2020 before becoming director of campaigns as he plotted the partys rise to power this year.

He was initially appointed head of ­political strategy in Downing Street in July but soon clashed with Ms Gray, who was meant to have been delivering the programme for government.

There were numerous briefings that he was at the head of a boys club inside No 10, along with Cabinet Office minister Pat McFadden, with Ms Gray on the other side. Amid jostling for position between the sides, it was even reported that she had moved Mr McSweeneys desk further away from the PMs office.

Deputy Prime Minister Angela Rayner arriving in Downing Street today

Then Ms Gray hit the headlines after it emerged that she was being paid more than Sir Keir and stayed away from Labour conference, although she joined him on important trips to see Joe Biden in ­Washington DC and Donald Trump in New York.

One senior figure told the Mail: The lads have clearly won this round.

Former Shadow Chancellor John McDonnell also accused the boys in No 10 of caring more about ­getting rid of Ms Gray than dealing with more ­important matters facing the world.

He wrote online: Were facing the ­potential of a war setting the Middle East alight, already ­thousands are being killed in Lebanon, and what is the focus of the boys around Keir Starmers office, carving up Sue Gray and grabbing her job and salary. Words fail me.

Mr McSweeney, whose wife Imogen Walker is a newly elected Labour MP in Scotland, has been given two female assistants.

Vidhya Alakeson and Jill ­Cuthbertson were both ­promoted from roles in No 10 to become deputy chiefs of staff.

Touring broadcast studios this morning ahead of Parliament returning from the conference recess, Defence Secretary John Healey paid tribute to Ms Grays contribution

Another senior woman in Downing Street, director of the policy unit, Nin Pandit, was also given a powerful new civil service role, that of principal private ­secretary to the PM.

It had been thought that the recruitment process had been held up by tussles between Ms Gray and others in No 10 over who should get the job, as she reportedly favoured a former colleague.

Ms Pandit worked for many years in the NHS and will be joined in Downing Street by a ­former director of communications of NHS England.

James Lyons will lead a new strategic communications team following concern that No 10 had been too slow to react to ­damaging stories including the rows over freebies and influential donor Lord Alli, as well as the briefings against Ms Gray.

Sir Keir said: Im really pleased to be able to bring in such ­talented and experienced ­individuals into my team. This shows my absolute determination to deliver the change the country voted for.

Ms Gray now becomes the Prime Ministers envoy for the regions and nations, and is expected to take a pay cut from her former salary of £170,000. 

She said in a statement: It has been an honour to take on the role of chief of staff, and to play my part in the delivery of a Labour government.

Throughout my career my first interest has always been public service. However, in recent weeks it has become clear to me that intense commentary around my position risked becoming a ­distraction to the Governments vital work of change.

It is for that reason I have ­chosen to stand aside, and I look forward to continuing to support the Prime Minister in my new role.

Tory MP Saqib Bhatti said: Morgan McSweeney wins the battle against Sue Gray. It was clear he and his allies have been briefing against her since day one.

Its unlikely to be the end of the matter and does not bode well for stability at the top of government.