By Daniel Martin

Last updated at 1:45 PM on 11th October 2011

So long GOD: Sir Gus O'Donnell will retire from his role as Cabinet Secretary at the end of the year

So long GOD: Sir Gus O'Donnell will retire from his role as Cabinet Secretary at the end of the year

David Cameron told Cabinet this morning that the most powerful mandarin in Whitehall is to retire.

The Prime Minister heaped praise upon Sir Gus O'Donnell, who will step down from his 240,000 job as Cabinet Secretary at the end of the year.

He has some reason to thank Sir Gus, who helped smooth the construction of the Coalition during those historic negotiations in May last year.

But there has long been some disquiet among Tories that the Cabinet Secretary – known as GOD from his initials – had become just too omnipotent.

To many, he was the towering symbol of the way technocrats had become more powerful than elected ministers.

As backbencher Douglas Carswell put it this morning: 'It is these permanent officials that really decide most public policy. All too often, elected ministers end up as mere mouthpieces for the machine.

'It is precisely because we have such a smug, insulated technocracy in charge that voters are left complaining that no matter who they vote for, things rarely seem to change.'

Sir Gus is certainly powerful. Not only is he the most senior policy analyst for the PM, he is in charge of the Cabinet Office, and is the head of the entire civil service.

It's a big job, and Mr Cameron has decided it's too big for one man. So alongside the revelation of Sir Gus's retirement this morning was the news that his job was to be split; not just two ways, but three.

Jeremy Heywood, currently Permanent Secretary at Number 10, will step up to take over from Sir Gus as Cabinet Secretary, providing advice to Mr Cameron and Nick Clegg.

He will be present at all Cabinets and will be responsible to all ministers for the running of Cabinet government. That's Job One.

Job Two. Another mandarin will be appointed Head of the Civil Service, responsible for providing professional and corporate leadership to civil servants.

David Cameron, left, heaped praise upon Sir Gus, right, but there has long been some disquiet among Tories that he had become too omnipotent

David Cameron, left, heaped praise upon Sir Gus, right, but there has long been some disquiet among Tories that he had become too omnipotent

And finally, Job Three is the appointment of a new Permanent Secretary in charge of the Cabinet Office, responsible for joined-up government and cutting costs.

Ian Witmore, currently head of the Cabinet Office's efficiency and reform group, has already been lined up for this role.

The PM hopes the splitting of Sir Gus's empire will ensure that never again are civil servants able to lord it over the elected Government.

But the news that one man is to be replaced by three sits uneasily with the coalition's aim of slashing the size of the state.

Earlier this year the Daily Mail revealed that, although headcount was falling, bureaucrats were still taking on hundreds of staff.

Another difficulty is that Sir Gus will retire at just 58 years old. The rest of us, who will be forced to work until our late 60s before being able to draw down our pensions, have good reason to feel a pang of envy.

John Spellar, a former Labour minister, is already kicking up a stink about that.

And talking of pensions, Cabinet Office documents reveal he'll do rather well. Sir Gus will be able to draw down a lump sum of 315,000 straight away. And until he dies, he will get 105,000 a year.

His pension pot, valued at more than 2.3million, will – of course – be funded by us.