Tony Blair will today announce the creation of a new Cabinet post to breathe new life into a unit set up eight years ago to tackle Britain's underclass.

The Prime Minister will announce the new ministerial role at a speech to the Scottish Labour conference in Aviemore, in his first visit north of the border since the party's battering at the Dunfermline by-election last month.

Hazel Blears, the loyal Home Office minister, has been tipped as a likely candidate for the post, which bears a similarity to the duties performed by the late Mo Mowlam at the Cabinet Office.

The announcement will form part of the Prime Minister's long-awaited overhaul of the Cabinet Office. The co-ordinating role of the Chancellor of the Duchy of Lancaster has been vacant since John Hutton was promoted to replace David Blunkett as Work and Pensions Secretary in November.

The Social Exclusion unit - created in 1998 to give life to Mr Blair's pledge to be "tough on the causes of crime" and to narrow the gap between rich and poor - has been repeatedly criticised for failing to seize the initiative. KPMG, the management consultants, concluded that although the unit had come up with innovative proposals it failing to implement them.

The new post will inject greater urgency into a programme to transform the poorest neighbourhoods tackling issues such as high mortality, poor exam results, and high unemployment. It is likely to also take on aspects of the "Respect" agenda, removing responsibilty for anti-social behaviour from the Home Office.

David Sinclair, policy manager at Help the Aged, said the creation of a ministerial post cutting across a series of government departments was "excellent news".

"A minister at Cabinet rank will be armed with the authority and capacity to link relevant Government departments together and ensure that the report is properly implemented and not left to gather dust on a Whitehall bookshelf."

Adam Sampson, director of Shelter, said poor housing was a driver of social exclusion, trapping families in poverty.

"With more than one million children growing up in emergency, unfit or overcrowded homes that ruin their health, education and future chances, the first priority for any new social exclusion minister must be to tackle Britain’s housing crisis," he said.

The Conservatives were less impressed. Caroline Spelman, the local government spokeswoman, said that the announcement was a dose of "reheated" spin.

She said: "We welcome any genuine step to help the disadvantaged in our society. But I fear this is yet another attempt by Mr Blair to grab the headlines with a quick fix, reheating announcements he’s made before.

"In reality, his Government can’t even agree who should fund his Respect Unit, and there are 50 different fragmented initiatives for regeneration and exclusion. The vulnerable in our society are losing out due to division and department turf wars in the heart of Whitehall."

Labour's conference in Scotland comes at a sensitive time. The leaderless Liberal Democrats overturned a Labour majority of more than 11,500 to clinch Dunfermline seat in Gordon Brown's home constituency. The Chancellor is not expected to appear at the conference.

The party in Scotland faces a Holyrood general election in May next year.

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