Shadow chancellor Alan Johnson has dramatically quit the Labour front bench over what he said were “personal issues”.
His surprise announcement forced Labour leader Ed Miliband to reshuffle his team after just three months.
Ed Balls, passed over for the job in October, was installed as Chancellor George Osborne’s new opposite number.
Sources close to Mr Miliband said he had not wanted to lose Mr Johnson and insisted his departure had nothing to do with repeated questions about his suitability for the job.
The Labour leader said Mr Johnson had done a “good job” and stressed that the arrival of Mr Balls in the Treasury brief did not mark a change of economic policy.
In a statement, Mr Johnson said he was resigning 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.”
Mr Balls, a fierce ally of former prime minister Gordon Brown, has questioned Labour’s deficit reduction plans in the past, suggesting they should be less aggressive, but Mr Miliband stressed there would be no change to Labour’s economic policy.