Ruth Kelly did little yesterday to dampen down speculation about her unhappiness with Gordon Brown's premiership as she admitted political concerns contributed to her forthcoming departure, lauded David Miliband as a "star" and failed to rule out the possibility of a leadership challenge taking place.

Westminster's outgoing Transport Secretary also expressed her frustration at the way her decision had leaked out. While No 10 insists it had nothing to do with the leaking, suspicions are held that it feared Ms Kelly's decision was about to be announced along with resignations of at least two others in a bid to destabilise the Prime Minister.

The theory goes that by pre-empting it, Downing St was able to reduce the impact of Ms Kelly's resignation announcement and also disrupt any other planned departures. Illustrative of how jumpy the Westminster grapevine is, last night there were unsubstantiated rumours that another Cabinet minister was set to quit.

In a post-conference interview, Ms Kelly, MP for Bolton West, admitted that family reasons were not the only ones that led her to resign. Asked if there had been a political aspect to her decision, she replied: "Yes, there was a balance as there often is in my life but my prime concern was my family and a desire to see more of my children." The 40-year-old politician has four, all under 11.

As Ms Kelly made clear she would not like to see Mr Brown use next week's expected Cabinet reshuffle to ditch Blairite ministers, she lavished praise on Mr Miliband, the Foreign Secretary. She said: "He is one of the great talents of the cabinet, a star of the future, a real asset and a good friend."

The Secretary of State also refused to rule out the prospect of a leadership contest, saying: "It's impossible to say what is going to happen." However, she stressed that in the short term, given the global economic crisis, the UK Government had to be focused on this and that anything else would be seen "as a distraction".

Last night, Ladbrokes put Harriet Harman, the deputy leader, as the new favourite to replace Mr Brown with her odds moving from 5/1 to 3/1; Mr Miliband's lengthened from 2/1 to 7/2.

Yesterday, there was more evidence of a "Brown bounce" following the PM's speech at the Labour conference with a BBC poll, which showed that more people (36%) trusted Mr Brown and Chancellor Alistair Darling to handle the economy in difficult times than their Conservative opposite numbers, David Cameron and George Osborne (30%). Only 5% favoured the Liberal Democrats' Nick Clegg and Vince Cable, while 24% were don't knows.

An earlier post-Labour conference poll cut the Tories' previous 20-point lead in half. Mr Brown will be hoping that the expected reshuffle - due at the end of next week - could boost Labour ratings further.

Jim Murphy, the Europe Minister, is tipped to be Scottish Secretary while Liam Byrne, the Immigration Minister, has been suggested as a replacement for Ms Kelly. A question-mark continues to hang over Des Browne, who currently holds the two portfolios of Scotland and Defence.

Tony McNulty, Westminster's Police Minister, as well as Nick Brown, the Deputy Chief Whip, have been mentioned in relation to replacing Geoff Hoon as Chief Whip. Mr Hoon, a former MEP, has been linked to Mr Murphy's current Europe post.

Two other potential flashpoints are the first meeting of Labour MPs on October 6, the day Westminster returns from its summer recess, as well as the Glenrothes by-election, expected on November 6.

Last night, the SNP continued to pile the pressure on Mr Brown to visit the by-election campaign after Lindsay Roy, Labour's candidate, said he would be "disappointed" if the Prime Minister did not put in an appearance.

Tricia Marwick, the Nationalist MSP for Central Fife, argued that the PM, instead of "pulling the strings from London", should go and explain face to face to voters in Glenrothes why he was "not helping people meet the cost of higher fuel bills this winter".