Sue Gray has quit her role as Sir Keir Starmer's chief of staff, plunging his Government further into crisis.
The former civil servant had been the Prime Minister's top aide in No10 since Labour's general election victory in July.
But there have been repeated reports of power battles and bitter tensions between Ms Gray and other senior figures in Government and Downing Street.
And Ms Gray admitted the rows have become a "distraction".
Sir Keir's chief adviser and former Labour general election campaign director, Morgan McSweeney, will replace the former civil servant as Downing Street Chief of Staff.
Ms Gray said: "After leading the Labour party's preparation for government and kickstarting work on our programme for change, I am looking forward to drawing on my experience to support the Prime Minister and the Cabinet to help deliver the government's objectives across the nations and regions of the UK.
"In addition to building a close partnership with devolved governments, I am delighted this new role will mean continuing to work alongside and support the Prime Minister, Deputy Prime Minister, the Cabinet and the Mayors on English devolution.
"It has been an honour to take on the role of Chief of Staff, and to play my part in the delivery of a Labour government.
"Throughout my career my first interest has always been public service.
"However in recent weeks it has become clear to me that intense commentary around my position risked becoming a distraction to the government's vital work of change. It is for that reason I have chosen to stand aside, and I look forward to continuing to support the Prime Minister in my new role."
A Conservative Party spokesperson said: "In fewer than 100 days Sir Keir Starmer's Labour Government has been thrown into chaos - he has lost his Chief of Staff who has been at the centre of the scandal the Labour Party has been engulfed by.
"Sue Gray was brought into deliver a programme for government and all we've seen in that time is a government of self-service. The only question that remains is who will run the country now?"
But Keir Starmer said: "I want to thank Sue for all the support she has given me, both in opposition and government, and her work to prepare us for government and get us started on our programme of change.
"Sue has played a vital role in strengthening our relations with the regions and nations. I am delighted that she will continue to support that work."
