Keir Starmer handed his deputy, Angela Rayner, a major promotion on Sunday night after a day of fraught negotiations and power battles. He also sacked his shadow chancellor and promoted his close ally, Rachel Reeves, to the role in a move likely to further inflame tensions with the party’s left. The reshuffle of Starmer’s shadow cabinet was derailed by a prolonged standoff with Rayner, who was locked in talks with the party leader’s team for hours on Sunday. It came after leaked plans to sack her as party chair and national campaigns coordinator triggered an outcry. The Guardian understands Starmer initially offered Rayner a frontbench role covering the social care brief but she regarded that as a significant demotion and was determined to maintain influence over internal Labour politics and policy. Rayner emerged with a significantly beefed-up role, handed the shadow chancellor of the Duchy of Lancaster role shadowing Michael Gove as well as a newly created post as shadow secretary for the future of work. She will also retain joint control over party matters as deputy leader. Rayner’s move from party chair had been planned as the first in a wider reshuffle following a series of disappointing results for Labour in Thursday’s local elections. But the announcement of further changes was delayed throughout the day as Starmer’s team tried to placate his livid deputy, who is widely seen as a potential future leadership challenger. Despite losing her role as party chair, allies of Rayner said she would retain significant ultimate control over party matters. Anneliese Dodds, the former shadow chancellor, will have joint control and chair Labour’s policy review. “Keir’s office failed to articulate a vision or set out what Labour stands for, and then they tried to blame Angela for the local elections,” one ally of Rayner said. “She’s going to be much more visible taking the fight to the Tories on corruption, leading the fight on the future of our economy and jobs. Keir can’t connect with people in the red wall seats like she does.” Following the news of her new role on Sunday night, Rayner tweeted: “I will work tirelessly to reform our party and deliver a policy agenda that will enable us to reconnect with the voters that we need to win, especially in our traditional heartlands, and show that the Labour party speaks for the working class. That is our founding mission.” But she added: “I want to thank friends from all across the Labour party and our movement who have been in touch with me. United we stand, divided we fall. The past we inherit the future we build. Solidarity.” Party sources said there was barely concealed fury with Rayner that the row had dominated 24 hours of far more promising results for Labour, including in Wales and victories in the West of England, Cambridge and Peterborough and West Yorkshire mayoralties. “We could have spent the last day celebrating the much better results for Labour in Wales and elsewhere if Angela’s people hadn’t decided to try and blow the party up over who runs what bits of Labour HQ,” one source said. ‘The obsession with internal power plays must end.” Starmer also sacked the chief whip, Nick Brown, a veteran of both the Brown and Corbyn years. Both Dodds, who served in John McDonnell’s shadow treasury team, and Brown were seen as key appointments from the soft left of the party and the promotion for Reeves, seen as Starmer’s closest shadow cabinet ally, puts the party’s centre in the ascendency. Few other changes have been made, despite briefings that Starmer wanted to sack the shadow foreign secretary, Lisa Nandy, a briefing his team expressly denied. Alan Campbell will replace Brown as chief whip and Thangam Debbonaire will become shadow leader of the Commons. Other promotions included Wes Streeting, another key figure from the party’s centre, who moves to a new shadow cabinet brief for child poverty. Lucy Powell, a key figure from the Ed Miliband years, will be shadow housing secretary. Starmer said the party would refocus on bold ideas and the priorities of the British people. “The Labour party must be the party that embraces the demand for change across our country,” he said. “Just as the pandemic has changed what is possible and what is necessary, so Labour must change too.” The row between Labour’s two most senior figures overshadowed more positive election results for the party over the weekend, including a resounding win in Wales. Rayner has her own Labour power base because she was directly elected to the position of deputy leader, which she will keep in any event. Senior Labour sources were confirming on Saturday evening that she had been asked to relinquish her elections role, as the party shakes up its approach to campaigns in the light of losses in Thursday’s Hartlepool byelection and on English councils. But by Sunday morning, after senior figures including Andy Burnham signalled their dissent, the message had changed and Starmer loyalist Ian Murray, the shadow Scottish secretary, was claiming Rayner had been offered a bigger role. “Angela Rayner hasn’t been sacked, as I understand it, Angela Rayner has been offered a significant promotion, to take her from the back office of the Labour party running elections, to the front office where she’s talking to the country,” he told Sophy Ridge on Sky News. He added: “Keir Starmer has decided to do a reshuffle of his frontbench to respond to those election results.” Former shadow chancellor John McDonnell said: “What public relations genius thought this was a good move on the day we were actually having successes?” Pointing out that he didn’t “hold a brief” for Rayner, having backed Rebecca Long-Bailey as deputy leader, he called the decision to try to sideline her “unfair”. Starmer has also hired former adviser to Gordon Brown and experienced pollster Deborah Mattinson to oversee Labour’s strategy. Several MPs suggested on Sunday that Starmer’s botched attempt to sideline Rayner had increased the chances he could face a leadership challenge in the coming months. The membership of the leftwing Campaign Group of MPs, which is most sceptical of Starmer’s leadership, falls short of the 40 Labour MPs whose signatures would be needed to launch a race. But Rayner’s treatment has sparked questions about Starmer’s leadership among some of his erstwhile supporters, while the size of the swing against Labour in Hartlepool caused alarm among MPs with slim majorities. “His moral authority is shot,” claimed one soft-left MP. Leftwing former shadow cabinet minister Jon Trickett told the Guardian on Sunday: “I think that he’s not trustworthy. If it comes to the question of ought there to be a leadership challenge, I don’t think we should rule it out.” Labour MPs will closely watch the byelection in Batley and Spen, triggered by the MP Tracy Brabin winning the post of West Yorkshire mayor and stepping down from parliament, creating a vacancy. Unlike Hartlepool, Batley and Spen did not see a significant Brexit party vote. If it was lost to the Tories it would be likely to spark panic in the parliamentary Labour party.