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Gordon Brown was dealt a devastating blow last night as James Purnell quit the Cabinet and told him to stand down to save the Labour Party.

The Work and Pensions Secretary’s sensational decision, given to the Prime Minister shortly before polling ended in the European and local elections, left an already damaged Mr Brown in grave peril. He told Mr Brown to stand aside and give Labour a “fighting chance of winning”.

The departure of such a talented minister in a crucial reforming role raised immediate questions over whether other ministers would follow, and whether Mr Brown had the authority to complete his Cabinet reshuffle.

Earlier in the evening, No 10 appeared reasonably confident that he could delay his reshuffle until Monday rather than rush it out today. There were signs that the e-mail plot to oust him was stalling and Caroline Flint, the Europe Minister, had let it be known that she would back Mr Brown.

But Mr Purnell’s resignation, far more damaging and unexpected than those of Jacqui Smith and Hazel Blears, may give Mr Brown’s critics the courage to make a final strike.

Several Labour MPs, including Graham Allen and Nick Raynsford, seized the moment to call on Mr Brown to resign. Mr Allen, one of the organisers of the e-mail plot, said that he hoped that Mr Brown would take the honourable way out and that the party would move decisively to replace him.

David Cameron reiterated his call for a general election.

No 10 said that Mr Brown was disappointed. There was irritation that Mr Purnell had given him little notice.

David Miliband, the Foreign Secretary and a close personal and political friend of Mr Purnell, and John Hutton, another leading Blairite, both said that Mr Purnell had been wrong to quit.Liam Byrne, the Cabinet Office Minister, said: “The public will not understand us turning in on ourselves.”

Mr Purnell, one of the leading Blairites in the Cabinet, told Mr Brown in a regretful letter: “We both love the Labour Party. I have worked for it for 20 years and you for far longer. We know we owe it everything and it owes us nothing. I owe it to our party to say what I believe no matter how hard that may be. I now believe your continued leadership makes a Conservative victory more not less likely.

“We need to show that we are prepared to fight to be a credible government and have the courage to offer an alternative future. I am therefore calling on you to stand aside to give our party a fighting chance of winning.”

Mr Purnell, 39, said that he was not standing for the leadership. “My actions are my own considered view, nothing more. If the consensus is that you should continue, then I will support the Government loyally from the backbenches. But I do believe that this question now needs to be put.”

He thanked Mr Brown for “the privilege of serving” in his Government.

Mr Purnell worked for Tony Blair in No 10 and has advanced swiftly through the ministerial ranks. He came close to resigning last summer in a crisis of confidence over Mr Brown. Privately and publicly he has praised Mr Brown’s economic leadership but has been increasingly worried about Labour going down to a bad defeat. He did not consult ministerial friends such as Lord Mandelson, Mr Miliband or Tessa Jowell about his decision. Friends said that he wanted it to be clear that he was part of no plot.

His shock decision overshadows Mr Brown’s reshuffle plans. Until last night, the biggest question was whether Mr Brown would persuade Alistair Darling to leave the Treasury so that Ed Balls could take over.

The Times was told that Mr Darling wanted to remain Chancellor. Mr Brown was keen to move in Mr Balls and was expected to offer Mr Darling another job, but if he walked out that might be a fatal setback for Mr Brown.

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