Alan Milburn has returned to the Cabinet in what Downing Street described as a "policy supremo" role.

Milburn, who quit as health secretary just 14 months ago to spend more time with his family, has been appointed chancellor of the Duchy of Lancaster.

In his new role, he will serve as Labour's general election co-ordinator.

He will also become the government's member of Labour's national executive, chairman of Labour's general election planning group and a member of the election strategy group chaired by Tony Blair.

Downing Street sources have also revealed that Milburn will supervise the Number 10 Policy Directorate and the Strategy Unit.

The prime minister has also promoted Alan Johnson, another loyalist, to the job of work and pensions secretary.

Most of the papers agree that the changes represent a victory for the prime minister over Gordon Brown.

But the Sun decries the reshuffle as "a shambles" which leaves Blair in a weaker position.

A friend of the chancellor tells the Times that Blair appeared to be acting in a "deliberately confrontational" way.

"There could be carnage ahead," he said.

"There will be rows over everything. Milburn will forever be trying to portray Gordon as the safety first merchant."