Sir Mark Sedwill will step down from his dual role as Cabinet Secretary and national security adviser as he makes way for a Number 10 overhaul.

Rumours had swirled that Sir Mark, the most powerful civil servant in Government, was to be ousted this week as part of Boris Johnson’s shake-up of the Civil Service.

The Prime Minister was quick to announce David Frost, his Europe adviser, as his new national security adviser (NSA), taking over from Sir Mark in September when he formally stands down.

Mr Frost will continue to lead the trade negotiations with the European Union, he confirmed in a statement.

In his letter to Mr Johnson, Sir Mark said: “Two years ago, when my predecessor fell ill, your predecessor asked me to step in as Cabinet Secretary, and you asked me to continue to support you through Brexit and the election period.

“It was obviously right to stay on for the acute phase of the Covid-19 crisis.

“As you are setting out this week, the Government’s focus is now shifting to domestic and global recovery and renewal.”

The PM, who will give a speech laying out his blueprint for economic recovery in the wake of the coronavirus pandemic on Tuesday, praised the outgoing public servant for his “outstanding” work over the course of his 30-plus year career.

“It has been by any standards a massive contribution – but as PM I have particularly appreciated your calm and shrewd advice,” he wrote to Sir Mark in his responding letter.

Announcing Mr Frost’s new position, Mr Johnson said: “I have asked David to help me deliver this Government’s vision for Britain’s place in the world and to support me in reinvigorating our national security architecture and ensuring that we deliver for the British people on the international stage.”

Both Sir Mark and Mr Frost are to be awarded life peerages, Downing Street confirmed, elevating them to the House of Lords.

Sir Mark, who previously served as ambassador to Afghanistan and was the top civil servant in the Home Office, was appointed Cabinet Secretary in 2018 by then prime minister Theresa May when the 54-year-old was already the NSA.

But in recent months there have been reports that Dominic Cummings, the PM’s chief aide, wanted the public servant removed.

Speculation of the father-of-one’s exit was further fuelled when Simon Case – appointed permanent secretary in No 10 amid the coronavirus crisis – was favoured over Sir Mark to lead the Government review into the two metre social distancing restrictions, which helped lead to the lockdown easing announced by the PM last week.

Mr Case has been heavily tipped to become the next cabinet secretary following Sunday’s announcement.

Labour criticised the timing of the PM’s decision to reform his backroom team, with the announcement coinciding with reports that one million more people could become unemployed, on top of 2.8 million people currently jobless, if further Government support is not forthcoming by August.

Helen Hayes, shadow minister for the Cabinet Office, said: “On the day it was revealed millions of jobs across the country could be under threat in the coming months, it is very concerning that Boris Johnson and Dominic Cummings are preoccupied with reshuffling Whitehall.”

The FDA, the body which represents civil servants, said the Government would be “weaker as a result” of Sir Mark’s departure.

General secretary Dave Penman said: “Sir Mark Sedwill has been one of the outstanding public servants of his generation, serving the country’s interests at home and abroad as a diplomat, weapons inspector, permanent secretary and ultimately Cabinet Secretary.

“Whatever emerges as fact from the series of briefings that have sought to undermine Sir Mark’s position, this Government will emerge weaker as a result.”

The FDA accused “No 10 – or those around it” of seeking to “undermine” the head of the civil service with a “series of anonymous briefings against him over many months”.