Karl Rove, the chief adviser to President Bush, is to give up his role in formulating policy as the shake-up continues in President Bush's White House team.

Mr Rove, referred to by political commentators as the President's Brains, will instead focus more on politics with the approach of the mid-term elections this autumn, a senior administration official said today.

Mr Rove was made deputy chief of staff in charge of most White House policy co-ordination after the last election. The new portfolio came on top of his existing role as Mr Bush's senior adviser and chief policy aide.

He is expected to keep the title of deputy chief of staff, but will hand over his responsibility for policy co-ordination to Joel Kaplan, currently the White House’s deputy budget director, who will take over the job of deputy chief of staff for policy, said the official.

"Karl Rove has not been sidelined or demoted. He quite clearly remains absolutely at the heart of the Bush administration as the most trusted and influential adviser to the President," said Tom Baldwin, Washington Correspondent of The Times.

"What appears to have happened is that he has returned to the role he has traditionally played with Mr Bush, rather than the aggrandized role he was given after the 2004 election. Essentially, he will be less involved in overseeing policy and more involved in what he is really good at, which is directing the general political strategy of the administration."

The news of Mr Rove's job change came minutes after Scott McClellan, the White House press secretary, revealed that he was resigning. Mr McClellan made his announcement as he accompanied the President onto the White House South Lawn to board a helicopter at the start a trip.

"I have given it my all, sir, and I have given you my all, sir, and I will continue to do so as we transition to a new press secretary," said Mr McClellan, a Bush intimate who has clashed fiercely with reporters on Iraq and on intelligence issues.

The President added: "It’s going to be hard to replace Scott, but nevertheless he’s made the decision, and I accept it."

Faced with slumping poll numbers and a credibility gap with Americans over the Iraq war, Mr Bush is trying to breathe new life into his second term. His administration has been criticised even from within his own party for its slow reaction to Hurricane Katrina and to the row over the Dubai ports deal. Corruption allegations among Republicans have deepened the sense of crisis.

The shake-up in the administration began several weeks ago when Josh Bolten, the budget director, was appointed as the President's new chief of staff. Mr Bolten took up his new job last week, and has since met every member of the White House personnel to talk about their futures.

Mr Bush said yesterday that he had given Mr Bolten broad authority to remould the team. "With a new man will come some changes," he said.

Mr Rove's new, slightly lower profile role may be politically convenient as critics of the Bush Administration have frequently attacked him. Recently he became involved in the fringes of a political scandal, when he was accused of revealing the name of an undercover CIA agent, Valerie Plame, to a reporter from Time magazine, in alleged revenge after Ms Plame's husband criticised the administration over the build-up to the Iraq war.

Mr Rove has acknowledged speaking to the reporter, Matthew Cooper, but denies wrongdoing. Lewis "Scooter" Libby, the former chief of staff to Dick Cheney, the Vice President, has been indicted over the affair. Mr Rove has not been indicted but remains a subject of the investigation.

Possible replacements for Mr McClellan, meanwhile, have been under discussion on political blogs for several weeks. Fox News reported today that several people have been approached by the White House as potential candidates, including television show host Tony Snow, former Pentagon spokesman Victoria Clark, and Dan Senor, the former spokesman for the Coalition Provisional Authority in Iraq who worked alongside Paul Bremer.

This week Mr McClellan acknowledged that he has held the demanding job for a long time.

"Any White House goes through change. People decide to leave after they’ve served here for a while. It’s hard work serving here at the White House," he said on Monday.

"There are a number of people who have served this president for a long period of time. So you have to balance change with continuity."

Yesterday Mr Bush announced two new senior economic aides, naming Rob Portman, the US trade representative, as his budget director and the deputy trade representative, Susan Schwab, to replace Portman. Both nominations require Senate confirmation.

Asked however about Donald Rumsfeld, the US Defence Secretary who is the subject of bitter attack from several retired generals, Mr Bush was unyielding.

"I have strong confidence in Don Rumsfeld. I hear the voices, and I read the front page, and I know the speculation, but I’m the decider, and I decide what is best, and what’s best is for Don Rumsfeld to remain as the secretary of defence," he said.

"I must tell you that I’ve got strong confidence in my Cabinet officials -- all of them -- and I appreciate the service they’ve rendered," he said.

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