LONDON, May 5 (Reuters) British Prime Minister Tony Blair sacrificed two top ministers in a major cabinet shakeup today after his Labour Party recorded one of its worst defeats in a local election since coming to power in 1997.
Foreign minister Jack Straw and interior minister Charles Clarke lost their high-profile jobs while John Prescott, who is Blair's deputy and has been embroiled in a sex scandal, lost his ministry.
Environment minister Margaret Beckett takes over from Straw at the Foreign Office.
The reshuffle comes after accusations of government incompetence and sleaze over the past few weeks as well as the poor local election results, which have put huge pressure on Blair to give his government new impetus or step aside.
''This is clearly a major reshuffle,'' said Mori pollster Ben Page. ''It looks as though he is going for a radical change.'' Clarke will leave government while Straw becomes leader of the lower house of parliament. Defence minister John Reid will take over from Clarke, who has been accused of incompetence after foreign prisoners were released without checks.
''Margaret Beckett going to the Foreign Office was certainly not something anyone had predicted. Reid is a marvellous all round player for Tony Blair and here he is saving his bacon again,'' Page told Reuters.
Yesterday's vote was held in 176 of the 388 local authorities in England, with 4,360 council seats up for grabs.
Results on a BBC Web Site showed Labour had lost 256 of the 1,768 seats it was defending, while a resurgent opposition Conservative party under new leader David Cameron gained 252.
''This is a warning shot for us as a government,'' said finance minister Gordon Brown ahead of the reshuffle. ''The renewal of the Labour Party must start now.'' SORT OUT THE PROBLEMS Brown, who has been finance minister ever since Labour returned to power in 1997, has long coveted Blair's job. He is widely expected to take over before the next general election, due by mid-2010 at the latest.
Relations between the two have been tense, although they campaigned together for the local elections and Brown said today that Blair and Labour wanted an orderly transition.
Blair, who won his third straight election in 2005, has said he will quit before the next election, but has not set a date.
Critics have attacked the prime minister in the past two weeks over a spate of scandals including the failure to consider deporting foreign prisoners, hospital staff cuts and his married deputy's admission that he had an affair.
''We have got to show in the next few days, not just the next few weeks, that we have sorted these problems out,'' said Brown.
''I will be talking to Tony Blair about these issues over the weekend.'' Voters in Britain traditionally use local elections to punish the government, but analysts had said the loss of many more than 200 seats would be seen as a bad result for Blair.
''The Conservatives have had their best result since 1992 and it shows they are on the way back,'' said pollster Page.
''But it doesn't mean that Labour are going to lose the next election. It just shows it will be close. This is far from meltdown.'' The poll was also a crucial test for the Conservatives under new leader Cameron who is trying to transform his party into a modern, caring political force and drag it out of the wilderness after three straight election defeats.
''This shows the Conservative Party is broadening its appeal, that it's attracting new voters, and I think we see a Labour Party that is in some sort of serious meltdown,'' Cameron told GMTV television. ''I'm a happy man this morning.'' REUTERS OM KP1706