Alan Milburn has been widely tipped to make a swift Cabinet return in a forthcoming government reshuffle.

The former health secretary was reported in a number of Sunday and Monday newspapers to be set to be appointed as Labour Party chairman in an announcement which could be made as early as the end of this week.

Milburn quit the Cabinet in July last year citing a desire to spend more time with his family.

But the Darlington MP has remained close to Tony Blair and has made a number of contributions to the debate on Labour's third term manifesto.

The prime minister postponed a reshuffle earlier in the summer after Peter Mandelson delayed on deciding whether to accept a posting to Brussels as a European commissioner.

However a small pre-election reorganisation could now take place ahead of the annual party conference at the end of the month.

Demotion

Current Labour chairman Ian McCartney is one of a handful of figures tipped for demotion having presided over a poor European and local election campaign in June.

However deputy prime minister John Prescott is said to be lobbying for the Scot to stay in Cabinet, possibly alongside Milburn as a co-chairman.

Such an arrangement could see the media-friendly Milburn become the main mouthpiece for the party, with the more abrasive McCartney managing relations with the unions.

But it could also anger chancellor Gordon Brown - who fell out with Milburn over hospital reforms - and who could resent an arch-Blairite having a key role in the general election campaign he and protege Douglas Alexander are meant to be running.

Union chiefs have also reacted angrily to the news that McCartney could go.

"Ian is an effective operator and a real friend to the trade unions and grass roots' Labour members," Unison general secretary Dave Prentis said.

"He worked hard behind the scenes to heal the rifts within the party.

"Without his efforts, the divisions beetween us and Cabinet ministers would have widened.

"We continue to support Ian. What we need more than anything in the run up to the election is stability."