Culture Secretary James Purnell has been appointed Secretary of State for Work and Pensions by Prime Minister Gordon Brown.

He replaces Peter Hain, who resigned earlier today after the Electoral Commission asked the police to investigate his failure to declare more than £100,000 in donations to his campaign for Deputy Leader of the Labour party.

Mr Purnell’s Culture job will be taken by Chief Secretary to the Treasury Andy Burnham.

Yvette Cooper, currently Housing Minister, is to take the number two role at the Treasury.

She is the wife of Ed Balls, the Secretary of State for Children, Schools and Families and one of the Prime Minister’s closest political allies.

Although Ms Cooper attended Cabinet in her previous role, her appointment to the Chief Secretary job is a considerable promotion.

Mr Hain’s other role as Welsh Secretary is to be taken over by Paul Murphy, currently the chair of the Intelligence and Security Committee.

A former Minister of State and Secretary of State for Northern Ireland, he rejoins the Cabinet after two years and eight months on the backbenches.

He previously served as Welsh Secretary from 1999 to 2002.

Caroline Flint will move from Minister of State at Work and Pensions to replace Ms Cooper as Minister of State for Housing and Planning, a role that entitles her to attend Cabinet.

In his resignation letter to the Prime Minister Mr Hain said:

“I have come to the conclusion that I now have no alternative but to resign … in order to give myself the time and opportunity to clear my name.”

Mr Brown replied: “I recognise that, given the circumstances and your desire to clear your name, this is the right and honourable thing to do.”

FULL TEXT OF BOTH LETTERS

Dear Gordon,

As we discussed this morning, in view of the Electoral Commission decision today, I have come to the conclusion that I now have no alternative but to resign from my posts as Secretary of State for Work and Pensions and Secretary of State for Wales, in order to give myself the time and opportunity to clear my name.

I have made it absolutely clear that I very much regret reporting donations to my deputy leader campaign late and I made this public as soon as I could.

When I discovered on 29th November last year that there was a problem, I saw the Electoral Commission as soon as I could and cooperated fully, including supplying all the details they asked for.

I made a mistake but it was an innocent mistake.

I am very grateful for the support you have shown me throughout this episode and for appointing me to your Cabinet where we have worked together to take forward the goals of social justice, equal opportunities and democratic reform in which I have always believed.

It has been a real privilege to head both the Department for Work and Pensions and the Wales Office, and a privilege to serve as a Minister in our Government since 1997. You will continue to have my absolute support.

I am fortunate to have the steadfast support of my wife Elizabeth, my parents and the whole of my family, and I am also very grateful for the support of my local Labour Party in Neath, of Labour MPs and Ministerial colleagues.

Best wishes, Peter.

Dear Peter,

Thank you for your letter confirming your decision to resign from the Government.

I recognise that, given the circumstances and your desire to clear your name, this is the right and honourable thing to do.

I also recognise that in making this decision you have as ever put the country’s interests before your own.

I want to thank you for the valuable work you have done for the Government over the last decade, most recently at DWP where you have advanced the Government’s work on opportunity and welfare reform. I believe that, during your time in this post, you have successfully put skills at the heart of our welfare policy.

You have also played a number of important Ministerial roles in Government.

Throughout your time in office you have shown real commitment to representing the interests of Wales within Government.

And, of course, you played a vital role in Northern Ireland where you should be proud of the contribution you made to securing peace and stability.

Over many years you have always played an active role in politics and I know that you will continue to make a contribution to public life in the future. I would like to place on the record my thanks for your years of public service.

Yours sincerely,

Gordon.