Shadow Chancellor Alan Johnson dramatically quit the Labour front bench last night, citing “personal issues”.
In a blow for Labour leader Ed Miliband, Mr Johnson abruptly announced that he could not cope with issues facing his family while in the role.
Ed Balls, currently shadow home secretary, will take his place.
Mr Johnson was only appointed to the key economic portfolio in October but has faced repeated questions about his suitability for the job.
In a statement, he said: “I have decided to resign from the Shadow Cabinet for personal reasons to do with my family.
“I have found it difficult to cope with these personal issues in my private life whilst carrying out an important front bench role. I am grateful to Ed Miliband for giving me the opportunity to serve as shadow chancellor of the Exchequer. He is proving to be a formidable leader of the Labour Party and has shown me nothing but support and kindness. My time in Parliament will now be dedicated to serving my constituents and supporting the Labour Party. I will make no further comment about this matter.”
A Labour reshuffle will see Yvette Cooper, Mr Balls’ wife, take over from him as shadow home secretary.
Douglas Alexander becomes shadow foreign secretary, Liam Byrne will be shadow work and pensions secretary and Tessa Jowell takes over as shadow Cabinet Office minister.
In a statement, Mr Miliband insisted Labour had a “strong, confident” Shadow Cabinet.
“It is with great regret that I have accepted the resignation of Alan Johnson,” he said.
“As shadow chancellor and a politician who held five Cabinet positions, Alan showed real leadership on issues that mattered to families across our country, warning of the dangers posed by the Government’s gamble on growth and jobs, promoting educational opportunity and delivering neighbourhood policing.
“Ed Balls is an outstanding economist and is hugely qualified to take our economic message to the country.
“In Yvette, Douglas, Liam and Tessa, we have a team which combines extensive experience in government and determination in opposition.
“I am proud that Labour has a strong, confident Shadow Cabinet that will expose the mistakes of this Conservative-led Government.
“Together we will put the economy at the forefront of our argument as we work hard to regain the trust of the British people.”
Mr Balls, a former Treasury minister who came third in last year’s Labour leadership contest and has long coveted the economics role, said: “It is a great honour to be appointed to this post, and to succeed my friend and colleague Alan Johnson whose commitment to social justice and service to the Labour Party is second to none.