Gordon Brown is considering restoring a full-time Secretary of State for Scotland to the cabinet as part of an attempt to beef up the Scotland Office and improve the relations between Westminster and Holyrood.

The Prime Minister-in-waiting, reported to be dismayed at the spat between Alex Salmond, First Minister, and Downing Street over a Memorandum of Understanding between the UK and Libya, wants to make sure such a breakdown in communication will not happen again.

While even some of the Prime Minister's closest allies believe the row over the memorandum was "a total mess up", Tony Blair told MPs yesterday Mr Salmond's office could have ended any uncertainty by a simple inquiry.

According to senior Labour sources, a former Scottish Office civil servant is reviewing present arrangements but they revealed Mr Brown is already minded to have a full-time Scottish Secretary, as well as reformed joint committees and improved lines of communication.

Until recently he was being lobbied to appoint a Secretary of State for the nations and regions, and a Minister of State for Scotland, Wales and Northern Ireland but a tranche of his colleagues believe there is a role for a full-time Scottish Secretary.

Lord Foulkes of Cumnock, now a member of the Scottish Parliament, welcomed the possibility of a full-time Secretary of State. He said: "We are in a totally new political situation which needs someone to keep an eye on the Scottish ball at all times."

Douglas Alexander, currently part-time Scottish Secretary and an ally of Mr Brown, may be considered for the role. Others mentioned are Defence Secretary Des Browne, David Cairns, Minister of State in the Scotland Office, Nigel Griffiths, who quit over the government's decision to support a replacement for Trident, and Ministers of State Jim Murphy and Adam Ingram.