Business Secretary Vince Cable will retain responsibility for telecoms and IT manufacturing but has been stripped of most of his other IT responsibilities, following the row over his hostile remarks about Newscorp's bid to take over the remaining independent shares in BSkyB.
He will retain responsibility for manufacturing IT and wider electronics equipment, IT services and software sectors and will continue to work with the Cabinet Office in the cyber security programme.
But his former responsibilities for mobile and fixed telecoms, content industries including games and publishing, telecoms policy, broadband policy and delivery and internet policy and governance, including the Digital Economy Act, have been transferred to Culture, Olympics, Media and Sport Minister Jeremy Hunt.
Culture, Communications and and Creative Industries Minister Ed Vaizey will now report only to Hunt although he "will work closely with" Cable and his department.
Labour shadow business secretary John Denham said: "This is not a plan for growth; this is more a punishment beating of Vince Cable... For no other reason than the Business Secretary's personal unsuitability to make a competition judgement, responsibility for an entire crtitical industry – the digital economy – has been thrown up into the air.