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Jacqui Smith, the Home Secretary, is to stand down from the Cabinet to focus her efforts on saving her Commons seat after bruising revelations over her parliamentary expenses.

A source close to Ms Smith said that she told Gordon Brown of her intention to resign two months ago amid a controversy over her second home claims. The source said that she had "hurt" by the controversy, which included the humiliation of having to refund taxpayers for two blue movies watched by her husband.

On a day when it appeared when the Prime Minister's control of events was looking particularly shaky, it emerged that another minister was also heading for the exit. Tom Watson is standing down as Cabinet Office minister but will continue to advise the Prime Minister and help organise campaigns.

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Ministers are leaving fast. The ship of state is looking rocky

Philip Webster, Political Editor

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Mr Watson, known as the first MP to have set up a blog, was among Brownite loyalists who joined the alleged Curry House Conspiracy against Tony Blair's leadership in 2006 and has been among Mr Brown's closest coterie of advisers at No 10.

In addition, three other Labour MPs – David Chaytor, Beverley Hughes and Patricia Hewitt – announced that they would be leaving the Commons at the next election, adding their names to an increasingly long list.

Mr Chaytor is accused of claiming £13,000 in parliamentary expenses for a mortgage that had already been paid off. The MP for Bury North said that he was stepping aside because his priority in the coming months must be to explain his errors to investigators.

"This will be time-consuming and stressful," he said. "I have referred my case to the Parliamentary Commissioner for Standards and will co-operate fully with his inquiry."

Ms Hughes, the Children's Minister, insisted this morning that her decision to step down as MP for Stretford and Urmston had nothing to do with MPs' expenses but was motivated purely by family reasons.

Ms Hewitt, the 60-year-old former Health Secretary, said that she would not be seeking re-election in her constituency, Leicester West.

"I did initially want to serve another term. But I feel the time is right," said Ms Hewitt.

"The truth is that after 13 years as an MP and ten years in Government, I have not seen enough of my family. They have paid a high price for that."

Ms Smith's decision to jump before she was pushed - she had been widely expected to be moved from her post - paves the way for an even broader Cabinet shake-up in a reshuffle now expected on Monday.

That reshuffle is also expected to see Alistair Darling moved from the Treasury in favour of Ed Balls, the Schools Secretary. Mr Darling, one of the Prime Minister's oldest political allies, could be offered another senior Cabinet post, perhaps that of Foreign Secretary.

No 10 rejected reports of Ms Smith's resignation as "reshuffle speculation" but it is clear that she wants to retain her seat in Redditch, Worcestershire, where she has a a relatively slender majority of 2,716.

Ms Smith is being investigated by the parliamentary Commissioner for Standards after claiming her main residence was her sister's London home. That allows her to claim £116,000 on her Redditch home which she shares with her husband and children.

Items claimed included a flat screen TV, scatter cushions, a £40 barbecue and even a bathplug.

She was also forced to pay back £10 she claimed for the two adult films watched by her husband, Richard Timney, who is employed as her assistant.

Today a campaign group in Redditch said that it had gathered 1,180 signatures calling for Ms Smith to quit over her expenses.

The Jacqui Must Go Now! group said it aimed to gather more signatures than Ms Smith's 2,716 majority.

There were mixed feelings in Ms Smith’s constituency. Peter Turner, 72, a lifelong Labour voter, said: "It’s very embarrassing for her, her husband’s actions were the most damaging.

"I would consider voting for her but I think the tide is against her at the moment. The husband, the bath plug, it was all a bit petty wasn’t it - fancy claiming for a bath plug."

Another constituent said: "If we hadn’t found out about this it would still be going on, that is the worrying thing. I’ll be glad to see Jacqui Smith go, most people around here are angry with her and I don’t think she has any hope of getting the votes. If any ordinary person had behaved like these politicians, they would have been arrested."

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