MR Tony Blair last night demoted his transport spokeswoman, Ms Clare Short, despite her strong showing in the shadow cabinet elections.
There were reports that Ms Short, a left wing MP, strongly resisted the move, particularly in the light of her third place in the ballot of MPs.
But after a day of intense activity behind the scenes, the outspoken Ms Short agreed to accept the unglamorous overseas development portfolio in place of the more high profile transport brief.
Her transport job goes to one of the most favoured lieutenants of Mr Blair and his shadow chancellor, Mr Gordon Brown - the former shadow chief treasury secretary, Mr Andrew Smith.
And Ms Harriet Harman, who came last in the shadow cabinet poll, swaps jobs with Mr Chris Smith, taking on the social security brief and handing him the health brief.
Another figure close to both Mr Blair and Mr Brown - the City spokesman, Mr Alistair Darling - becomes shadow chief secretary.
Both appointments suggest the leader has Mr Smith and Mr Darling pencilled in for places in a Labour cabinet in government even though they have not been elected to the shadow cabinet.
The other key change was Mr Blair's decision to re establish a shadow cabinet ranking environmental protection, or "green", brief.
That goes to Mr Michael Meacher, who as an employment spokesman, was eclipsed by Mr David Blunkett who heads the joint education and employment brief.
The Labour leader also signalled his strong faith in the occasionally maverick social security expert, Mr Frank Field, by appointing him to sit on a new welfare to work committee.
The two most striking moves were the Smith Harman job swap and Ms Short's removal to a lower profile portfolio.
Just minutes after hearing she had retained her shadow cabinet place but had come in 19th with only 19 elected places available, Ms Harman said she was looking forward to "continuing my works on health, which is such an important issue for the party and the country".
But a variety of complexions were being put on the move yesterday: left wingers believe Ms Harman, who is indebted to the leader because of his successful but high risk campaign to have her re elected, would be asked to bite into the welfare budget in a way that Mr Smith refused to do.
Other MPs said privately that they believed Ms Harman had failed to tackle the key issues facing the NHS and that Mr Smith would carry out a much more rigorous overhaul of Labour's approach to the problems in office.
Both Ms Harman and Ms Short will also take a place on the new welfare to work committee on which Mr Field will sit.