Sir Chris Wormald has stood down as Cabinet Secretary and head of the Civil Service.
The Cabinet Office said Sir Chris was departing by “mutual agreement “ with Sir Keir Starmer.
But he appears to have been forced out as the Prime Minister seeks to rebuild his No10 team to try to get his crisis-hit Government back on track.
In a statement on his departure, Sir Chris said: “It has been an honour and a privilege to serve as a civil servant for the past 35 years, and a particular distinction to lead the service as Cabinet Secretary.
"I want to place on record my sincere thanks to the extraordinary civil servants, public servants, ministers, and advisers I have worked with,” he added in comments which did not mention Sir Keir.
The Prime Minister said he was "grateful" for Sir Chris's "long and distinguished career of public service" and his "support" as Cabinet Secretary.
Sir Keir added: "I have agreed with him that he will step down as Cabinet Secretary today. I wish him the very best for the future."
Dame Antonia Romeo, who is widely tipped to be in line for Sir Chris' former job, Catherine Little and James Bowler will share the responsibilities of Cabinet Secretary for an interim period.
The Permanent Secretary at the Home Office, Permanent Secretary at the Cabinet Office, and Permanent Secretary at the Treasury respectively would take over the duties following the departure of Sir Chris on Thursday.
The Prime Minister will appoint a new Cabinet Secretary "shortly" and the appointment process will be agreed by the First Civil Service Commissioner, the Cabinet Office said.
It made the announcements after a day of Downing Street confusion over the future of Britain’s top civil servant.
Earlier, Sir Keir’s’s attempts to rebuild his Downing Street team turned to farce as No10 insisted there was still a Cabinet Secretary but was unable to name him or her.
Sir Chris was already believed to be on his way out as head of the Civil Service as the Prime Minister sought to reset his Downing Street operation after the storms surrounding the appointments of Lord Peter Mandelson and Lord Matthew Doyle despite their association with paedophiles.
It comes after the departures of Sir Keir’s chief of staff Morgan McSweeney and communications director Tim Allan.
Rumours that Sir Keir intended to replace Sir Chris with Dame Antonia Romeo, the Home Office Permanent Secretary, triggered a highly unusual warning by a former top mandarin against “doing the due diligence too late”.
Dame Antonia’s former boss Lord Simon McDonald, ex-Permanent Secretary at the Foreign Office, said there should be a “full process” to appoint a new Cabinet Secretary and that “needs to start from scratch”.
Amid the turmoil, No10 took the highly unusual stance of saying there is still a Cabinet Secretary but refusing to name him or her.
The Prime Minister’s official spokesman said: “Yes, the Cabinet Office is still being supervised by the Cabinet Secretary.”
But pressed who is the Cabinet Secretary, he added: “I'm not going to comment on the ongoing speculation. I’ve got no update.”
Dave Penman, head of the FDA union of senior civil servants, said Sir Chris was still Cabinet Secretary.
“What we’re seeing is speculation and press briefing, presumably from people in No10 about his position while he’s serving the country as Cabinet Secretary,” he told BBC radio.
“That is just extraordinary, not only undermining in terms of...this individual but the role of Cabinet Secretary and has a chilling effect across the Civil Service.
“This is no way to run a country.”
Tory leader Kemi Badenoch seized on Lord McDonald’s intervention as she criticised the Prime Minister’s expected move.
In a letter to the Civil Service Commission, she said: “It is hard to escape the conclusion that the Cabinet Secretary is simply the latest person to be thrown under a bus by this Prime Minister.
“It is all the more concerning to be changing Cabinet Secretary in the midst of the ongoing scandal over the appointment of Lord Mandelson and his conduct in office.”
Mrs Badenoch urged the commission to advise Sir Keir to delay the sacking until the disclosure of Government files relating to Lord Mandelson, overseen by the Cabinet Secretary, is complete.
The probe led by the top civil servant into the former UK ambassador to Washington’s contact with paedophile financier Jeffrey Epstein while he was a government minister should also be concluded first, she said.
Lord McDonald told Channel 4 News on Wednesday evening that a new Cabinet Secretary must not be “chosen on the fly”.
He added: “If the Prime Minister wants a new Cabinet Secretary, he needs to start from scratch.
“The Prime Minister has recent bitter experience of doing the due diligence too late.”
Dame Antonia was reportedly investigated when she was Britain’s consul general in New York in 2017 over her expenses and claims of bullying, but was later cleared by the Cabinet Office.
A Government source said there was “absolutely no basis for this criticism” against her.
”Antonia Romeo is a highly respected permanent secretary with a 25-year record of excellent public service,” the source added.
A second Government source went further, saying: “This is a desperate attempt from a senior male official whose time has passed but spent their career getting Britain into the mess it finds itself in today.
“Antonia is a disrupter. She isn’t settled with the status quo.
“Antonia is exactly the leadership the Civil Service need to embrace systemic reform to rewire the state, take on vested interest and deliver for the British people.
“The allegations all come from a single grievance made some time ago by a former employee.
“All the allegations were dismissed on the basis there was no case to answer.”
Sir Chris’s departure came just 14 months after he was named the UK’s top civil servant and the Prime Minister’s most senior policy adviser.
