Cabinet secretary Sir Gus O'Donnell will step down from his post as the head of the civil service before the end of this Parliament.
Last night Channel 4 News reported that Whitehall's top mandarin was set to quit, but Downing Street and the Cabinet Office have insisted his departure is not imminent. He is now expected to serve for another one or two years.
Sir Gus had been due to retire at the general election but stayed on to help oversee the transition of power from Labour to the coalition.
A government spokesman said: "Sir Gus O'Donnell is remaining as cabinet secretary. Sir Gus agreed to stay on beyond the general election to oversee an orderly transfer of government.
"The prime minister is delighted that Sir Gus has now agreed to continue to serve as cabinet secretary, and looks forward to him continuing to fulfil that role with distinction."
Sir Gus was appointed cabinet secretary in 2005 and has worked in both Labour and Conservative administrations. He has held a variety of civil service roles at the Treasury and at the British embassy in Washington as well as representing the UK at the International Monetary Fund and World Bank.
Sir Gus joined the civil service in 1979 from his position as a lecturer in political economy at Glasgow University.
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