Suella Braverman has been sacked as home secretary, after she defied No 10 over an article accusing the Metropolitan Police of bias in the policing of protests.
Mrs Braverman was accused of stoking tension ahead of protests in London.
James Cleverly has been announced as her replacement, with former prime minister David Cameron unexpectedly replacing him as foreign secretary.
She said serving as home secretary was “the greatest privilege of my life”.
Mrs Braverman’s sacking kickstarts a major cabinet reshuffle by Rishi Sunak as he reshapes his top team ahead of next week’s Autumn Statement.
Downing Street have announced Therese Coffey has left her role as environment secretary.
The prime minister’s official spokesman said: “This reshuffle will give the prime minister a united team to deliver the change this country needs for the long term.”
David Cameron has been out of Parliament since he stood down as prime minister in 2016 and has been given a seat in the House of Lords to enable him to take up his new position.
The Liberal Democrats are calling for his peerage to be blocked, referring to his lobbying for collapsed finance company Greensill Capital.
Senior Labour MP Pat McFadden said the former PM’s appointment “puts to bed the prime minister’s laughable claim to offer change from 13 years of Tory failure”.
Lord Cameron said he wanted to be “part of the strongest possible team that serves the United Kingdom” ahead of the general election.
“Though I may have disagreed with some individual decisions, it is clear to me that Rishi Sunak is a strong and capable prime minister, who is showing exemplary leadership at a difficult time,” he said.
In July, Mr Cleverly said he would have to be dragged out of his foreign secretary job “with nail marks down the parquet flooring”.
But on Monday, Mr Cleverly said it has been a “huge privilege” to serve as foreign secretary, and that being home secretary was a “fantastic job”.
He refused to be drawn on whether he would distance himself from Mrs Braverman’s time in the Home Office. “I intend to do this job in the way that I feel best protects the British people and our interests,” he said.
Mr Cleverly inherits some major challenges from his predecessor.
Top of the pile is the still raging row over pro-Palestinian protests in London. Downing Street is understood to want him immediately to review police powers to make it easier to ban marches and prosecute those glorifying terrorism.
Less than two days into the job, Mr Cleverly will have to deal with a Supreme Court decision on the lawfulness of the government’s Rwanda policy.
Even if the government win, the policy is likely to see further legal challenges from individual asylum seekers attempting to avoid being sent to Rwanda.
Since her elevation to home secretary by former PM Liz Truss, Mrs Braverman has been seen as a standard bearer for the right in the Conservative party.
In a statement, Mrs Braverman said: “I will have more to say in due course”, leading to speculation she may cause trouble for the leadership.
She lost her job following days of a political firestorm sparked when she wrote an article for the Times newspaper, accusing the police applying a “double standard”, by taking a tougher stance with right-wing demonstrations.
It later emerged Mrs Braverman had defied a Downing Street request to tone the article down.
Labour, the Liberal Democrats and some Tory MPs had called for Mrs Braverman to be sacked.
Shadow home secretary Yvette Cooper said Mrs Braverman actions were “highly irresponsible” and inflamed tensions, making the job of the police harder.
She said the “buck stops” with Mr Sunak, who should “never have reappointed” Mrs Braverman.
This is the second time Mrs Braverman has been removed as home secretary. She was forced to resign as Mrs Truss home secretary after it was revealed she had shared confidential cabinet papers with long-time ally Tory MP Sir John Hayes.
Mrs Braverman’s return as home secretary for Rishi Sunak was a political surprise. Under his leadership, she carved out a reputation as a right-wing outrider in Mr Sunak’s government often grabbing headlines with her comments.
Sir Jacob Rees-Mogg called Mrs Braverman’s sacking “a mistake” that will hit the Conservative’s chances of winning the next general election.
“Suella understands what the country thinks about migration,” Sir Jacob told GB News and she was “determined to get it down”.
There were suggestions she was a “politically useful pressure valve” for Mr Sunak – allowing him to indirectly signal approval for right-wing populist policies without having to make those statements himself.
But that appears to be at an end, with the return of Lord Cameron – who headed a coalition government with the Lib Dems – shoring up the Conservatives’ liberal wing.
As Mr Sunak’s reshuffle continues, several ministers have announced they are leaving government.
Jeremy Quin, who attended cabinet as a junior minister, has stepped down from the Cabinet Office.
Rachel Maclean said she was asked to stand down as housing minister – the sixth minister to the role in the last three years.
Long-serving Schools Minister Nick Gibb announced he was resigning and would step down as an MP at the next election, while Neil O’Brien said he had left his role as health minister.
Will Quince has also resigned from the Department of Health and Social Care, while Jesse Norman has left his role as a transport minister.
The now former environment secretary Ms Coffey said in a resignation letter to the prime minister: “Having been a minister since July 2014, and having served all five Conservative prime ministers, I consider it is now the right time to step back from government.”
