Sue Gray has quit her role as Prime Minister Sir Keir Starmer’s chief of staff, saying she “risked becoming a distraction”.

She had been caught up in rows over pay, after the BBC’s political editor revealed her salary was higher than Sir Keir’s, and donations from Lord Alli.

A Downing Street spokeswoman confirmed Ms Gray is to take up a new role as the PM’s envoy for nations and regions.

Labour said Ms Gray will be replaced by Morgan McSweeney, who was previously chief adviser to the PM and masterminded Labour’s election campaign.

Ms Gray has been subject to intense internal briefings and criticism, with Whitehall sources claiming she was excessively controlling and causing delays in government decision-making.

Resigning, she said it had been an honour to “play my part in the delivery of a Labour government” as Sir Keir’s chief of staff, both in opposition and in No 10.

“Throughout my career my first interest has always been public service,” she said.

“However in recent weeks it has become clear to me that intense commentary around my position risked becoming a distraction to the government’s vital work of change.

“It is for that reason I have chosen to stand aside, and I look forward to continuing to support the prime minister in my new role.”

Thanking Ms Gray for her work preparing Labour for government and in Downing Street, Sir Keir said he was “delighted” she would stay by his side in her new role.

He said: “Sue has played a vital role in strengthening our relations with the regions and nations. I am delighted that she will continue to support that work.”

The recent Labour conference was overshadowed by controversy over clothing donations from Labour peer and longstanding donor Lord Waheed Alli, for whom Ms Gray reportedly authorised a temporary Downing Street pass after the election.

A Conservative Party spokesman claimed the Labour government was “in chaos”.

He said: “In fewer than 100 days, Sir Keir Starmer’s Labour government has been thrown into chaos – he has lost his chief of staff who has been at the centre of the scandal the Labour Party has been engulfed by.

“Sue Gray was brought in to deliver a programme for government and all we’ve seen in that time is a government of self-service.

“The only question that remains is who will run the country now?”

The prime minster has reshuffled his top team with four other appointments, ahead of marking his first 100 days in office.

The move follows private frustration voiced by several sources over Downing Street’s communication strategy, which has led to the appointment of James Lyons, the former deputy political editor of The Sunday Times and the Daily Mirror.

He becomes the new strategic communications lead, alongside two new deputy chiefs of staff, Vidhya Alakeson and Jill Cuthbertson, and a new PM principal private secretary in Nin Pandit.

Sir Keir said: “This shows my absolute determination to deliver the change the country voted for.”