Darling must combine his transport and Scottish duties

The Scotland Office and Wales Office are to merge into a new department of Constitutional Affairs, headed by Lord Falconer.

Transport Secretary Alistair Darling will speak on Scottish affairs in the House of Commons.

Initially, Downing Street said the post of Scottish secretary would be abolished but then backtracked and said Mr Darling will now have two titles.

There was a realisation that the position is referred to in many pieces of legislation, not least the Scotland Act itself. However, the Scotland Office is scrapped.

His Welsh counterpart will be Peter Hain, the new Leader of the Commons.

Helen Liddell took over as Scottish secretary in 2001

In a letter to Tony Blair, Mrs Liddell told the prime minister that she wanted to "reclaim my private life".

The reshuffle also saw the appointment of Scottish MP John Reid as the new health secretary following the shock resignation of Alan Milburn.

Dr Reid was previously Leader of the House of Commons, a job he took over in April following the resignation of Robin Cook. The role will now be filled by Peter Hain.

Downing Street also confirmed that Lord Irvine, the Lord Chancellor, is retiring from the government.

Energy Minister Brian Wilson also announced that he was leaving the government to pursue "different challenges".

The prime minister told Mrs Liddell that she had given the government "distinguished service" over the last six years.

After six years in government I want to reclaim my private life, not least to allow me to enjoy more time with my husband, my family and friends Helen Liddell

"As Secretary of State for Scotland, you have played an essential role in strengthening the government's partnership with the Scottish Executive and in bedding down the devolution settlement which has, in my view, strengthened the UK and helped create a better, stronger Scotland," he wrote in a letter to the MP for Airdrie and Shotts.

"It is a result of that success that we are now able to make changes to the way that the Westminster Government handles Scottish issues, and I want to thank you for the constructive and selfless way in which you have approached our discussions on this."

In reply Mrs Liddell, who is married with two children, said it had been "the greatest honour" to serve in the government.

"My main priority has been to establish stability and partnership with the Scottish Executive and that I believe has been achieved," she wrote.

"I am confident that the actions your government has taken in establishing a Scottish Parliament has given Scotland a secure constitutional settlement into the future."

Private life

She said she had told the prime minister in January that she was thinking of moving on to other things.

"After six years in government I want to reclaim my private life, not least to allow me to enjoy more time with my husband, my family and friends," she said.

Mrs Liddell was appointed as Secretary of State for Scotland in January 2001.

The 52-year-old had held a number of posts before her elevation to the cabinet, including economic secretary to the Treasury and transport minister.

Merge posts

The powers of the Scottish secretary were reduced after devolution led to the establishment of the Scottish Parliament in 1999.

The Scotland Office was given the responsibility of "ensuring that Scottish interests are represented" at Westminster after devolution.

However, in January the House of Lords constitutional committee argued that the government should merge the posts of the Scottish and Welsh secretaries.