The furore surrounding Sue Gray shows the Prime Minister's fatal 'lack of principle', Kemi Badenoch says today.

The Tory leadership contender warns the 'wheels have well and truly come off' following the resignation of Sir Keir Starmer's controversial chief of staff yesterday.

Ms Gray has been at the heart of a string of scandals since Labour came to power – sparking rumours she was ousted within its first 100 days.

Writing in the Daily Mail, Mrs ­Badenoch says Sir Keir's decision to hire Ms Gray when she was a 'neutral' civil servant displayed a disastrous 'lack of integrity'.

The former women and equalities Tory leadership contender also reveals she clashed with Ms Gray in office - and rejected her attempt to persuade the last Tory administration to give in to Nicola Sturgeon's disastrous bid to introduce gender self-recognition.

'Refusing to listen to Sue Gray was one of my best decisions,' she writes. 'Hiring her will prove to be one of Starmer's worst - because it shows that Labour do not have principles.'

She spoke out after a dramatic day in Westminster in which Sir Keir showed his ruthless side by ousting his Chief of Staff, just 18 months after he controversially brought her into his party from a long career in Whitehall.

He had hoped her decades of experience as a civil servant would help Labour plan for government then deliver its manifesto promises.

But she soon was at loggerheads with a 'boys' club' in the party which continued into office and led to a series of damaging briefings.

Ms Gray, 67, was accused of trying to control access to the PM, impose her will on key policies and decide on senior appointments.

She was even said to have moved the desk of her bitter rival Morgan McSweeney - the successful election campaign chief who has now taken her job - further away from Sir Keir's office.

Ms Gray also fell out with special advisers after forcing them to take pay cuts, with anger intensifying against her after news leaked that she was earning more than then PM with a salary of £170,000.

And she was blamed for a lack of political nous that meant No 10 failed to shut down damaging rows over freebies and influential donor Lord Alli, to whom she is close, all while involved in separate croynism rows.

Rumours swirled in recent weeks that she would not last until Christmas, despite ministers continuing to praise her, and Ms Gray stayed away from Labour's first party conference since winning power.

Yesterday morning as Downing Street descended into chaos, Cabinet minister Peter Kyle refused to confirm Ms Gray was still in her role.

He told LBC radio: 'I can't comment on any public servant because it's not appropriate for me to comment on public servants who can't answer for themselves but I will say her public service and what she has done for this country... is something that I and this government is very proud of.'

Then just before 1pm Downing Street confirmed that Ms Gray, thought to have been in Northern Ireland this weekend, had quit as Chief of Staff.

She is instead taking up a newly created role as envoy for the nations and regions, and is expected to take a pay cut, although it is widely thought she will be handed a seat in the House of Lords later this year.

Sir Keir - who had spent weeks refusing to comment on briefings against her - said in a statement: 'I want to thank Sue for all the support she has given me, both in opposition and government, and her work to prepare us for government and get us started on our programme of change.

'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.'

She admitted: '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.'

Some figures within the party expressed relief that the PM had acted decisively against a close aide.

One told the Financial Times: 'Keir Starmer will always wield the knife when it needs to be done. Now he has.'

But others were in despair about the 'mess' created and said the PM should take responsibility.

The Conservative Party 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 into 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?'

Tory leadership contender Robert Jenrick pointed out that Sir Keir is also yet to appoint a new National Security Adviser while the country's top civil servant is leaving at the end of the year.

'Now, his handpicked chief of staff has been forced out by vicious Labour infighting. This Government is in free fall,' he said.

Labour peer Lord Rooker said of the shake-up: 'A chance to turn Labour into a Party of the First Respectability - which it has not been so far since July.'