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Update 1pm: Tory pin up and Mayor of London Boris Johnson has condemned the moving of Justine Greening, someone he describes as a 'first rate transport secretary'. He says that her opposition to a third runway at Heathrow - a policy he describes as "simply mad" - is the only possible reason and promises to fight Heathrow expansion all the way

Update: 11.45am: As I was saying... reshuffles never do quite go to plan.

Iain Duncan Smith was meant to be the new Justice Secretary this morning. The Daily Mail carried the story a few weeks ago. I reported the possibility last night. He was, in fact, offered the job by David Cameron last night but this morning said no and asked to be kept in charge of welfare reform.

The Treasury have always regarded IDS nervously, believing that whilst he might be good at the narrative and the caring he's not so good at keeping the pounds and pennies under control.

The Chancellor has announced his ambition to cut welfare by another £10 billion. The man in charge of welfare has told him and the prime minister that unless they cut benefits for the elderly like winter fuel payments, free TV licences and bus passes - which the PM refuses to do - that sum will prove politically impossible to find.

What's more, senior Whitehall officials have long worried that IDS's plan for a new Universal Credit could go the way of the health reforms - ie they sound good in theory but may prove bureaucratic, costly and unpopular in practice.

IDS knows that he's popular with his party as the man who led them in their darkest days and with many who campaign for the poor. That gives him real political power. Today he used it to say No to the prime minister.

The consequence is that the Treasury has another headache on their hands and prison policy will be run by Chris Grayling, someone harder line and more populist than IDS. That may please the Tory grassroots but will horrify many Lib Dems when he promises to take on the human rights culture and lock up more people.

What's already striking about this reshuffle is that it is being used to address Tory weaknesses in the long run up to an election - hence the new soothing presence of Jeremy Hunt at Health, Chris Grayling's harder line at Justice and a new pledge-free Patrick McLoughlin in charge of deciding whether there should be a new third runway at Heathrow.

Tuesday 08:30am: The work of re-shaping the government is well under way - last night David Cameron met with some of those ministers who he is asking to move.

Among them the now former Conservative Party Chairman, Baroness Warsi; former Environment Secretary Caroline Spelman and Ken Clarke who has agreed to leave his job as justice secretary but is expected to stay in the cabinet as minister without portfolio able to advise, on amongst other things, the economy.

Their moves will be part of a series which will reshape the government's middle and junior ranks. We could see new faces in a host of departments such as health, transport and work and pensions though none of these changes are confirmed.

One mover who is certain is Andrew Mitchell, who is to be the government's new chief whip, and leaves a vacancy at International Development.

The big winners - those promoted because, it is claimed, they will be better administrators or better communicators than those they replace - will march up Downing Street in front of the cameras to hear their good news.

The appointments will, say the PM's aides, prove that the government means business.

The chancellor, who will not be moving, was reminded of the scale of the political challenge the government faces when he was booed at the Olympic stadium last night.