John Prescott has been placed in charge of a key new cabinet committee in a shake-up that also sees the creation of a crisis management unit in the Cabinet Office.

The deputy PM will head-up a domestic affairs committee charged with drawing up policy and pushing "delivery" in all government departments except for foreign affairs.

The powerful new committee - widely seen as alternative power-base to Gordon Brown's Treasury - will involve the whole cabinet, including the chancellor, in the key second term areas of crime, welfare and transport.

Many in the media predict the new body will emerge as a rival to the chancellor's public services and public expenditure (PSX) committee which reviews spending allocations and monitors the government's reform programme for public services.

But Downing Street denies the rumours. "PSX is measuring output against Treasury targets, domestic affairs is a new home affairs committee, which oversees the key elements of the government's agenda," said the prime minister's official spokesman.

Tony Blair has also set up a new crisis management unit following widespread criticism of the government's handling of fuel protests and the foot and mouth epidemic. The new body will be headed-up by former Government Information and Communication Service chief, Mike Granatt.

The new troubleshooting unit will pull in 80 to 100 civil servants, logisticians and scientists from the Home Office and Ministry of Defence to the centre of the Whitehall machine.

The unit's brief includes "horizon-scanning" for crises in the offing, after Blair's shock at the speed at which chaos from last autumn's fuel protests unfolded.

Reporting direct to the PM, via cabinet secretary Sir Richard Wilson, the civil contingencies secretariat, will also tackle Whitehall's ability to deal with natural disasters, such as last years' floods and the continuing foot and mouth outbreak.

Working within every Whitehall department the new unit will identify areas of potential concern and draw up strategies for handling crises. Experts from outside government will be called upon, as will the police, and hundreds of people will be on standby should a crisis break.

In the event of a national emergency the secretariat will co-ordinate crisis meetings in Cobra, the Cabinet Office Briefing Room, controlling the flow of information around Whitehall and to the public.

Blair is to take the reins of several committees including welfare reform and the security services.

Prescott is to sit on 15 cabinet committees and will chair bodies on the regions, energy policy, the environment, and social exclusion and regeneration. Home secretary David Blunkett chairs six committees, more than any other minister, sitting on 16 others.

Gordon Brown will chair four, including economic affairs and competitiveness, and employment. Andrew Smith, the Treasury chief secretary and Brown's deputy, sits on 24 of the committees, more than any other cabinet member.