Boris Johnson on Friday reversed his decision to make David Frost, his chief Brexit negotiator, Britain’s new national security adviser, in a further sign of the prime minister remaking his Number 10 team.

Lord Frost, an ardent Brexiter who concluded the trade deal with the EU last month, will instead take up a different role as the prime minister’s “representative for Brexit and international policy”.

Mr Johnson’s decision last year to make Lord Frost his national security adviser — even though the former diplomat had no expertise in the field — was seen as new evidence of Brexiters taking key positions in government.

On Friday the prime minister announced that Stephen Lovegrove, permanent secretary at the Ministry of Defence since 2016, would instead take on the role of national security adviser.

Sir Stephen, a former banker with Deutsche, joins a new cadre of officials at the top of Mr Johnson’s government whose qualifications are based more on their executive qualities than their adherence to the Brexit creed. He was originally appointed to the MoD to bring a financier’s focus to managing the defence budget, which was perceived as being out of control.

In recent months Mr Johnson has appointed Simon Case, a former intelligence official, as cabinet secretary, and Daniel Rosenfield, a former Treasury official and investment banker, as his chief of staff.

Lord Frost’s appointment as national security adviser was championed by Dominic Cummings, the prime minister’s chief adviser who left Number 10 last year after a bitter fight to control the Whitehall machine.

However, supporters of Lord Frost say that the decision not to take up the NSA role, which he was supposed to start on Monday, was driven by his own preference for a wider ranging foreign policy role.

Lord Frost will instead work in Number 10 as a special adviser leading work on post-Brexit relations with the EU; the trade deal he secured last December leaves many areas of work incomplete.

“He wants to be more focused on the foreign policy side — it was what he wanted to do,” said one ally of Lord Frost. One Brexiter in government said the decision not to take up the NSA role “was driven by Frosty”.

A senior Whitehall insider said the move was “a demotion” and would be welcomed in the security world, but was likely to be bad for the nascent post-Brexit EU-UK relationship: during trade negotiations Lord Frost prioritised sovereignty over what he saw as short-term economic interests.

“Frost wants the relationship in the deep freeze for a few years,” said an official familiar with government thinking. The new UK-EU relationship is to be managed by a complex structure of committees that have yet to meet, but will shape the evolution of the deal over the coming years.

Jill Rutter of the Institute for Government, said Lord Frost would have been a “square peg in a round hole” as NSA, and that Whitehall had had to devise “workarounds” to compensate for his being a political appointee rather than a mandarin.

For instance, he would not have been able to oversee budgets for the security services or line management of the intelligence service chiefs.

“It always seemed to me that what the prime minister really wanted David Frost to do was actually a very different job which was to be his global affairs adviser, concentrating as much on trade, prosperity and global Britain as much as the NSA stuff,” she said. “And that is what this [new role] now opens up.”

Mr Johnson said: “I am hugely grateful to Lord Frost for his Herculean efforts in securing a deal with the EU, and I am thrilled that he has agreed to be my representative for Brexit and international policy as we seize the opportunities from our departure from the EU.”

Peter Ricketts, who was national security adviser under David Cameron, welcomed the appointment of a civil servant as opposed to a political adviser as NSA.

He said that even if Sir Stephen had not worked within the intelligence services, he would still have been “deeply involved” with security processes over the past five years at MoD. “He would have become a very well-known face around the national security community, of which the MoD is such a big part,” Lord Ricketts said.

Ciaran Martin, who stepped down last year as head of the National Cyber Security Centre, a branch of GCHQ, said Sir Stephen’s three years as permanent secretary at the Department of Energy and Climate Change was also “pretty useful” for a modern NSA, because of the increasing focus on energy security and the impact of climate change on national security.

Additional reporting by Sebastian Payne