Reid plans to cut Home Office into justice and security departments

A plan to split the beleaguered Home Office into two departments covering national security and justice could allow Labour to answer its critics by giving greater emphasis to civil liberties.

John Reid will tell cabinet colleagues that his crisis-hit department cannot cope in its present form with the increasing demands from terrorism, migration, crime and the criminal justice system. It follows a review after he said parts of the Home Office were "not fit for purpose".

In a concession to Labour's critics, the Home Secretary has accepted that the Government's record on civil liberties has been overshadowed by its tough approach on terrorism and crime, which has provoked accusations that it is relying on the "politics of fear".

He thinks that a more balanced picture of Labour's actions would emerge if one cabinet minister were responsible for security and another for justice. He hopes it would also reduce the bitter clashes between ministers and judges.

If Gordon Brown backs the plan, Mr Reid is expected to become the "security minister" in a Brown government. He would probably be responsible for terrorism, the police and immigration. Another cabinet minister would lead a Ministry of Justice, which would take over responsibility for the stages of the criminal justice system after an arrest - including the courts, prison and probation. This would probably subsume the Department of Constitutional Affairs, headed by Lord Falconer, which is currently in charge of running the courts, human rights, freedom of information and constitutional reform.

Yesterday Lord Falconer said the "very, very serious proposal" could be completed in months without fresh legislation. He told the BBC's Sunday AM show: "It may well be that split's time has come as we face, for example, much greater waves of immigration across the world, much greater threats of terrorism."

But David Blunkett, who blocked a similar plan to hive off part of his empire when he was home secretary, warned that the proposal would lead to the "Balkanisation" of Whitehall into departments that were too small. Mr Blunkett, who frequently clashed with judges, told ITV: "It would result in a Ministry of Justice which, in my experience of looking at it in other countries, means that the judiciary and those most concerned about protecting the perpetrator have their voice even more loudly heard in the echelons of government." He added: "We should think twice, three times, five times before doing it."

Tony Blair is believed to be sympathetic but is unlikely to proceed without the backing of Mr Brown, who is considering a shake-up of Whitehall as part of his government-wide spending review. He wants to create a single security budget covering the threats of domestic and global terrorism.

Allies of the Chancellor said he was not opposed to the Reid plan but that it was at its early stages. It will be discussed by the Cabinet in the coming weeks. The move would effectively mean the abolition of the Home Office, which was created in 1782.

Mr Reid said that after his review he needed to consider "even more fundamental reform". Writing in The Sunday Telegraph, he added: "There must be no sacred cows when it comes to protecting security and administering justice - the two fundamental roles demanded of the Home Office and the Home Secretary."

But David Davis, his Tory shadow, said: "The problems afflicting the Home Office have been embodied by a lack of co-ordination, whether it be the Immigration and Nationality Directorate not talking to Home Office records, or the police not talking to Home Office IT." The Tories want a separate cabinet minister within the Home Office with specific responsibility for security.