Alastair Campbell quits

Alastair Campbell sensationally quit today as Tony Blair's closest aide and No10 communications director.

David Hill will succeed him at 10 Downing Street but operate a new communications structure, Prime Minister Tony Blair's office said tonight.

Mr Campbell's immediate departure came after a blizzard of evidence to the Hutton Inquiry that he was at the heart of events leading to the death of weapons expert Dr David Kelly.

In evidence over the past two weeks, it emerged that he planned to leak to a newspaper the fact that the BBC's suspected source had come forward.

It was also revealed he proposed 15 changes to the Government's key dossier on Iraqi weapons including strengthening the critical 45-minute claim.

Tony Blair will now use his departure as the basis of a fightback to end Labour's reputation for "spin". Crucially, said sources, Mr Campbell's job will be split up under a "revised structure" at senior level in No 10.

His special powers to instruct civil servants are expected to be scrapped, with a senior civil servant promoted to handle press briefings separately from political manoeuvrings.

Mr Campbell will be replaced by David Hill, who was the Labour Party's director of communications. He is regarded as a "safe pair of hands" and is popular with MPs.

Downing Street hopes Mr Hill's straight-talking approach and low-key style will restore public trust after the Kelly affair. In a lengthy prepared statement, Mr Campbell said he had intended to resign a year ago but was asked by Mr Blair to stay on because of the situation with Iraq.

He will be "available" to No10 for the next few weeks to help with the handover. After that he will spend some time writing and broadcasting about politics and sport, before moving into any new job.

In a warm tribute to his adviser, Mr Blair praised his "skill and dedication" and dismissed his public image as a "caricature".

The Prime Minister said: "The Alastair Campbell I know is an immensely able, fearless, loyal servant of the cause he believes in, who was dedicated not only to that cause but to his country.

"He is a strong character who can make enemies but those who know him best, like him best. He was, is and will remain a good friend."

As reports of the surprise resignation swept Westminster this afternoon, Tony Blair was said to be locked away in Chequers planning the fightback while Mr Campbell explained his decision to a stunned private meeting of colleagues at No10.

He said later: "It has been an enormous privilege to work so closely, in opposition and in Government, for someone I believe history will judge as a great transforming leader of the Labour Party and a great transforming Prime Minister."

He said he looked back with pride to his role in modernising Labour, and winning two landslide election victories. But he added: "There is no such thing as a day off, or a night off, or a holiday without interruption.

"The pressures are real and intense, but in doing the job you learn to live with them. It is your family that pays a price."

Mr Campbell was often dubbed "the real deputy prime minister" and his departure strips Mr Blair of one his most powerful and trusted allies. On several occasions the PM has managed to dissuade the former tabloid journalist from walking away from No10, so central is he to New Labour's inner circle.

He has been chief spin doctor to Mr Blair since he became Labour leader in 1994. Known for his aggressive style with journalists, he stopped his daily briefings to the Westminster Press pack before the last election to play a more strategic role inside Downing Street.

Lord Hutton's report, expected in the autumn, could blame Mr Campbell for some of the key Government decisions in the chain of events which led to the death of Dr Kelly. His departure may help the Government to claim that it is starting afresh. Mr Campbell's partner, Fiona Millar, will leave at the same time as Cherie Blair's chief press adviser.

Today's statement by Mr Campbell confirmed reports that he had told Mr Blair again in April that he wanted to leave. On 28 May he is said to have drafted a press release announcing his departure. But the next day, the BBC broadcast its report claiming No10 had tampered with its dossier, triggering the row that has raged ever since.

Former Tory MP Michael Brown said this afternoon: "It is like having Tony Blair's brain literally taken out."