LONDON -- Prime Minister Margaret Thatcher reshuffled her Cabinet yesterday in the wake of Sir Geoffrey Howe's resignation as her deputy after a row over policy toward Europe.
She shifted three key portfolios, suggesting that she was going beyond simple damage limitation after losing the last member of her original 1979 Cabinet.
She did not appoint a new deputy prime minister, a title that was widely seen as a "sop" to Sir Geoffrey when he was demoted from the foreign secretary's post 15 months ago.
She selected Education Secretary John MacGregor to replace Sir Geoffrey as leader of the House of Commons. Kenneth Clark moves from health to education. William Waldegrave, widely regarded as one of the brightest young members of the government, leaves his job as junior minister at the Foreign Office to take on the full Cabinet responsibility of health.
The three moves touch the Conservative Party's prospects of re-election: The parliamentary leader's role is crucial to presenting the image of a government in firm political control; education and health are public services undergoing radical reforms in the face of increasing public criticism.
Neither Mrs. Thatcher nor Sir Geoffrey enlarged yesterday on their differences over Europe, which led to her deputy's shock departure Thursday.
But most political observers here believed Mrs. Thatcher would now have to moderate her opposition to European unity or face a possible leadership challenge.
Opposition leaders were quick to seize on the reshuffle to suggest Mrs. Thatcher was losing her grip on power.
Jack Cunningham, campaign coordinator for the Labor Party, said: "This is a government in terminal decline because it is a government being fatally misled by a prime minister who is, frankly, out of touch with realities in Britain and the realities in Europe.
"As far as most voters are concerned, Mrs. Thatcher is past the point of no return."
Paddy Ashdown, leader of the Social Democrats, said that Mrs. Thatcher was now "a prisoner of her own Cabinet," with the balance of power held "by those who don't share her views."