Baroness Warsi has been removed from her role as Conservative Party co-chairman in David Cameron's first major reshuffle of the coalition Government.

Lady Warsi had appealed to the Prime Minister to allow her to carry on in the post but she was widely expected to be moved on. Her deputy, Michael Fallon, housing minister Grant Shapps and employment minister Chris Grayling are seen as strong candidates to take over.

The peer used her official @ToryChairman Twitter account this morning to confirm she was "signing off", saying it had been "a privilege and an honour to serve my party as co-chairman".

Ken Clarke has agreed to leave his role as Justice Secretary but is likely to remain in the Government, the BBC reported. Mr Clarke was reported to be set to remain in the Cabinet as minister without portfolio - acting as a veteran "wise head".

Another minister who appeared to be among the casualties was Cheryl Gillan, who has removed references to her role as Welsh Secretary from her biographical details on Twitter.

The first confirmed appointment of the reshuffle was Andrew Mitchell as the new chief whip - a move confirmed late on Monday night. Mr Mitchell leaves his post as Secretary of State for International Development to replace Patrick McLoughlin, who is expected to be given a new job, in the key enforcer role for a Tory Party that has become increasingly rebellious.

Former Liberal Democrat Treasury minister David Laws is predicted to make a return to the front benches, while key figures such as Chancellor George Osborne and Foreign Secretary William Hague are widely expected to remain in place.

As Mr Cameron continued discussions with MPs to shape his new team, Downing Street said the new Cabinet would not meet today. The Prime Minister was reported to have returned to his House of Commons office - seen as a sign that he still has bad news to deliver to some senior party colleagues.

Iain Duncan Smith and Michael Gove will keep their jobs in the Cabinet, a senior Downing Street source said. The source said the Work and Pensions Secretary and the Education Secretary were considered "key reformers" by the Prime Minister, adding: "He wants them to stay in place to get the job done." The confirmation came amid reports that Mr Duncan Smith had been offered an alternative role - perhaps the justice brief expected to be vacated by Mr Clarke.

Environment Secretary Caroline Spelman is expected to be ousted from the Cabinet altogether in the shake-up.