Boris Johnson’s chief adviser Dominic Cummings is expected to leave his role by the end of the year, after Downing Street became gripped by a bitter power struggle.

The controversial Vote Leave veteran told the BBC that “rumours of me threatening to resign are invented”, after suggestions he was preparing to quit alongside communications director Lee Cain.

But he said his “position hasn’t changed since my January blog” when he wrote that he hoped to make himself “largely redundant” by the end of 2020.

Cabinet minister Grant Shapps said Mr Cummings “will be missed” but that he is not surprised the aide is departing, adding: “Advisers do come and go.”

Mr Shapps added, to BBC Radio 4’s Today programme, that the Prime Minister’s key adviser was “ready to move on” with the end of the Brexit transition period looming.

Conservative MPs urged No 10 to use his departure as an opportunity to restore the values of “respect, integrity and trust”.

Labour told the Government to focus on the coronavirus pandemic and not “self-indulgent spin doctors”.

Meanwhile, the Treasury has settled an employment tribunal claim with a former aide who was fired by Mr Cummings, with the PA news agency understanding that the Government will be paying out a five-figure sum.

The settlement with Sonia Khan, who advised then-chancellor Sajid Javid until she was escorted out of Downing Street by police, means Mr Cummings no longer faces the prospect of giving evidence in the case next month.

One of the most controversial figures in No 10, news of his departure came with the BBC quoting a Downing Street source saying he would be “out of Government” by Christmas.

Mr Shapps argued that Mr Cummings, whose infamy was cemented by his trip to Durham during the first lockdown, is leaving because his big projects of coronavirus mass testing and Brexit being “on the near-term horizon now”.

“He will be missed but then again we’re moving into a different phase,” the Transport Secretary told Sky News, adding that “advisers do come and go”.

Highly-publicised in-fighting led to the resignation on Wednesday of Mr Cain, with Mr Cummings said to be contemplating his own exit over the treatment of his political ally from the Brexit campaign.

Mr Cain had been offered the post of chief of staff but a backlash among Tories and the Prime Minister’s inner circle ultimately led him on Wednesday to announce his departure from Number 10 rather than a promotion.

Conservative MPs have urged Mr Johnson to use events to reshape the team inside Downing Street and reconnect with the parliamentary party, some of whom feel he has been “lost” to advisers over the past year.

Senior Tory backbencher Sir Bernard Jenkin told BBC Radio 4’s Today programme: “It’s an opportunity to reset how the Government operates and to emphasise some values about what we want to project as a Conservative Party in Government.”

He said it is time to restore “respect, integrity and trust” which he said have been “lacking in recent months” between No 10 and Tory MPs.

“I’m not surprised in a way that it is ending in the way it is. No prime minister can afford a single adviser to become a running story, dominating his Government’s communications and crowding out the proper messages the Government wants to convey,” Sir Bernard said.

“Nobody is indispensable.”

Tory MPs openly aired their criticism after the infighting spilled into the open.

Conservative backbencher Sir Roger Gale told PA: “The Government, and Downing Street particularly, should be concentrating all of its efforts on the pandemic and on the end game of Brexit, and, frankly, this is a distraction that cannot and should not be allowed to take place and the Prime Minister has got to get a grip on it.”

Shadow health secretary Jonathan Ashworth highlighted the strain being heaped on the NHS and the public by Covid-19, adding: “And Downing Street is paralysed by the soap opera of these self-indulgent spin doctors. It’s pathetic.”

His colleague on the Labour front bench, David Lammy, said the departures are “like rats fleeing a sinking ship”.

“His legacy is one of bullying, deception, hypocrisy and hubris. The super-forecaster who ignored the pandemic. His damage is irreparable,” he added.

The Prime Minister’s official spokesman, James Slack, who confirmed he would be replacing Mr Cain when he leaves in the new year, insisted that Mr Johnson is not being distracted from the national crisis by the row.

“You’ve seen from the Prime Minister this week that he’s absolutely focused on taking all the steps that are required to equip the country to beat coronavirus,” he said on Thursday.

Mr Slack, a former Daily Mail journalist who also served as Theresa May’s official spokesman when she led the country, said he would remain a civil servant when he succeeds Mr Cain.

In his resignation statement, Mr Cain confirmed he had been offered a promotion to the key position of the Prime Minister’s chief of staff.

The move – which would have meant he was one of just a handful of people in No 10 with direct one-to-one access to Mr Johnson – was seen as entrenching the grip of the Vote Leave faction on the Downing Street operation.

However it ran into immediate resistance, with Mr Johnson’s fiancee, Carrie Symonds – who has clashed in the past with Mr Cummings – reportedly strongly opposed to the appointment.

Ms Symonds is a former Tory press chief who has served as a special adviser in previous governments.

Allegra Stratton, the former broadcaster brought in to host televised No 10 news conferences from next year, was also said to have objected to the appointment.