(This post will be continuously updated as details emerge)
Clarke's lost the Home Office (possible yay, depending on who replaces him), Straw's lost the Foreign Office (why?).
Only announcement of an appoiintment so far makes no sense. The Blair government's relations with the EU have been an abject disaster over the last few years. They titted up the UK EU presidency, failing to get any substantive agreements through. Blair's close personal relationship with Silvio Berlusconi means he's screwed our relations with Italy under the new Prodi government. He failed to get close enough to Angela Merkel, meaning that the UK hasn't been able to capitalise on the potential shift in the France/Germany EU axis. For the last six months, the UK's done effectively bugger all in Brussels.
To revitalise our relationship with our EU cousins across the water, there needs to be a serious overhaul and rethink. A change of Europe minister could make sense (although Douglas Alexander has hardly been given much of a chance to make an impact since taking over from Dennis MacShane after the General Election last year.
What is needed for the Europe brief is someone charismatic, intelligent, and capable of thinking quickly on their feet in the volatile and still-shifting world of intra-EU politics.
So they've opted for Geoff Hoon, one of the least competent Defence Secretaries this country's had the misfortune to see. An intellectual nonentity. Someone guaranteed to fail dismally at forging the kinds of close partnerships the UK desperately needs to ensure a decent EU budget deal in the face of ongoing French stubborness.
Depending on who the new Foreign Secretary is, this looks almost like Blair's decided he simply couldn't care less about our interational relations any more. What the hell is he playing at?
Update 1: Guido is reporting Margaret Beckett to be Foreign Secretary. The woman who's titted up the distribution of EU Common Agricultural Policy subsidies to UK farmers, thus massively increasing resentment of the Brussels system amongst rural communities. Hardly someone to build bridges on the continent.
There's also the fact that, since her brief stint as leader of the Labour party after John Smith's death, she's hardly had much of a presence on the international stage. She's a past-it nonentity, who's shown little ability even to run a minor department over the last few years, let alone a brief as vital and wide-ranging as the Foreign Office. Has Blair finally lost ALL his political sense?
Guido also reports rumours of John Reid to be Home Secretary. The one member of the cabinet likely to be even more of an authoritarian bastard than Clarke. Hurrah.
Update 2: ePolitix seems to be updating with the latest announcements fairly coherently.
Beckett and Reid's promotions are confirmed (both potentially disastrous - for our international relations and internal liberties respectively).
Hazel Blears has replaced Ian McCartney as party chairman - so where's he off to? Duchy of Lancaster? The appointments are making no sense whatsoever at the moment (especially Jack Straw's demotion), so God alone knows...
Des Browne gets Defence - with his background in Child Law, he's obviously ideal to handle the logistics of maintaining troops in two incredibly hostile foreign warzones...
Prescott, meanwhile, retains his title but loses all his responsibilities.
Update 3: A Labour member (and reluctant Labour voter) writes:
This isn't a reshuffle, it's a death rattle.
Prescott DPM, but with no portfolio? Disastrous. An absolute mess that will appear to make no sense whatsoever, and keeps the story going.
Sacking Clarke? Right thing to do, everyone expecting it. Apart from, it seems, Clarke. He should keep his mouth shut about supporting Blair for the full parliamentary term. He's clearly angling to be the anti-Brown, but hasn't realised exactly how unpopular he really is in the party and the country.
Beckett as Foreign Secretary? Disastrous. Looks like there's no new talent to be promoted. Only superficially seems a safe pair of hands because no-one (honourable mention for the Private Eye) has bothered reporting the disaster that is DEFRA.
Straw demoted? Silly. Repeating the Robin Cook mistake. He's one of the few actually competent ministers left in the front ranks of the Labour Party. He'll be quite good, in that he's efficient, but he won't have time to do anything important.
Reid at Home Office? A fire-fighter, who can be relied on to make the best of a terrible situation. Might not be so easily cowed by his senior civil servants, although that's probably wishful-thinking on my part. Let's face it, we're not going to get a liberal in the Home Office while Blair's First Lord of the Treasury.
Hoon as SoS for Europe? Meh, the most important thing is it's cabinet rank. Hang on though - is this a new department of state, separate from the FCO, like DFID? Does this mean Beckett's only got half a job? What's going on?
Where the hell is the new blood?
Update 4: Ignore what I said earlier, ePolitix is rubbish. The Guardian's roundup is much better.
Charlie "flatmate" Falconer's gone to Leader of the Lords, helping to advance the abolition of the post of Lord Chancellor. There still remain a lot of question-marks, however - in particular how well thought-out the new Foreign Office situation is, what's happened to Douglas Alexander, and what did Jack Straw do to piss Tony off?
Update 5: More good stuff (as always) from the BBC - though still not comprehensive.
Douglas Alexander apparently going to Transport. I'm not at all convinced that Alan Johnson is the right person for the Education brief. Ruth Kelly's had a new local government position created for her, taking over Prezza's old responsibilities. Don't like her at all... Alistair Darling looks like a shifty low-rent lounge singer from a tacky imitation of a Vegas bar, but gets Trade.
Miliband gets to take over Margaret Beckett's mess at DEFRA. Meaning another £6,000 will have to be spent moving his blog over to the new department only a few weeks after he started it...
Inexplicably, Patty Hewitt and Tessa Jowell have both retained their jobs, despite all the scandals and screw-ups of recent weeks. Perhaps Tony simply ran out of people loyal enough to promote?