David Cameron removes 'vanity staff' from Downing Street payroll

• Photographer and filmmaker to be paid for by Conservatives
• PM denies news had been timed to be buried by royal wedding

David Cameron performed the sharpest U-turn of his premiership today, removing his former personal photographer and a filmmaker from the public payroll after intense criticism about the appointment of his so-called "vanity staff" to the civil service.

Downing Street acknowledged that the transfer of Andrew Parsons, Cameron's photographer, and Nicky Woodhouse, the filmmaker behind WebCameron, to the civil service "sent out the wrong message". The prime minister's official spokesman was later forced to defend the timing of the announcement, 20 minutes before the engagement of Prince William and Kate Middleton was revealed, after accusations that No 10 had hoped to bury a bad news story.

The decision to move Parsons and Woodhouse to the Conservative party payroll represents an embarrassment for Cameron, who strongly defended paying them from public funds during his tour of China last week. According to a Cabinet Office source, at least one senior minister questioned the appropriateness of hiring Parsons as a civil servant but the appointment was pushed through with the support of Cameron and his director of communications, Andy Coulson.

The salaries of Parsons and Woodhouse, between £36,000 and £44,000 each, will now be paid for by the Conservative party. They will lose their Cabinet Office desks and return to the party HQ at Millbank.

Downing Street sources said they stood by the logic of the appointments – that centrally employed media staff could cut the cost of the government's freelance media budget – but now acknowledged the move "sent out the wrong message" when the rest of the public sector was being asked to make savings. A No 10 source said: "The PM has decided that Andrew Parsons and Nicky Woodhouse will no longer be paid for by the taxpayer. Their jobs were across government and designed to save money; however, he does feel it sends the wrong message. We will continue to find ways to save money across government communications."

The pair were employed on short-term contracts, which allow governments to make personal appointments without advertising positions – but they are subject to civil service rules, and so must be impartial.

Labour's Michael Dugher said he welcomed the prime minister "bowing down to public pressure". The MP, who raised the issue two weeks ago with the cabinet secretary, Gus O'Donnell, added: "The prime minister should have known from the start that it's wrong to bill the taxpayer for his vanity photographer. But today's flip-flop raises more questions. If it's wrong to charge taxpayers for Andrew Parsons or Nicky Woodhouse, then why are so many other Conservative party workers being hired via this sharp practice as so-called civil servants?"

O'Donnell last week wrote to Dugher backing the appointments and confirming that 30 staff were employed on short-term fixed contracts, the majority of whom had not previously worked for a political party.

Others include Rishi Saha, an internet expert who is close to Cameron's inner circle and was head of digital strategy for the Conservatives, who was appointed deputy director of digital communications at the Cabinet Office.

In at least two unnamed cases the Cabinet Office conduct and ethics department was asked to vet the appointments and passed them.

The PM's official spokesman said tonight it was "simply not the case" that the announcement had been timed to be overshadowed by news of the wedding. It was made at 10.10am as Cameron was chairing a cabinet committee. Jeremy Heywood, the prime minister's permanent secretary, left that meeting to take the call from the palace about the engagement.

Contributor

Polly Curtis, Whitehall correspondent

The GuardianTramp

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