John Reid admitted his "head is on the block" as he unveiled reforms to the Home Office yesterday.
Birmingham MP Liam Byrne (Lab Hodge Hill) helped draft the proposals, which include reshuffling more than a quarter of the department's top officials.
But Lin Homer, who spent three years as Birmingham City Council's chief executive before taking over the Immigration and Nationality Directorate, will keep her job after Dr Reid said he had "full confidence" in her.
The immigration directorate is to become a semi-independent agency, and the Home Secretary vowed to clear the backlog of asylum cases in five year or less.
Other major reforms included cutting 2,700 managerial posts in the Home Office by 2008, with another 600 going by 2010, with the money saved going to front-line services.
Dr Reid asked Mr Byrne to help sort out the department after admitting it was "unfit for purpose".
Officials said Mr Byrne was chosen for the task because of his experience as a businessman before becoming an MP.
There was an outcry earlier this year when it was revealed that 1,023 foreign prisoners were released from UK prisons when they should have been considered for deportation.
But there have also been more recent difficulties, including last week's U-turn over police mergers.
Today, Dr Reid will unveil plans to "rebalance" the criminal justice system away from offenders in favour of the victims of crime.
There will be changed to rules on sentencing and changes to the way human rights laws operate.
Dr Reid is understood to be planning 8,000 new prison places, boosting current capacity in British jails from around 78,000 now, but he has yet to win the support of the Chancellor, who would need to approve funding.
Next week, Mr Byrne will publish detailed proposals for reform of the immigration service.
Dr Reid said the Home Office's problems could be traced to its failure to adapt to huge changes in the world and British society.
"Thirty years ago, even 15 years ago, the world was a pretty static place. The cost war froze people in a kind of immobility."
States were not allowed to fail, ethnic tensions and religious extremism were surpressed and people did not move around the world to anything like the same degree as now, he said. "We went from that, in a very rapid period, to a different world.
"Borders became porous, people started to move in massive numbers, ethnic tensions started to break out.
"There are now 200 million migrants every year. That's equal to the population of Brazil.
"And there were changes at a very local level as the things that once gave people security were eroded.
"The old static world where people stayed for generations in the same village was over. People no longer felt the same group allegiances to things like the churches, or trade union.
"The Home Office was formed at a time before these challenges existed."
Dr Reid admitted that one of the reasons the Government had scrapped plans to force police services to merge was fear of another defeat in Parliament.
The changes did not require legislation, but the Home Secretary would have needed to present the proposals for a vote in both the Commons and the Lords.
"It was pretty obvious to me that trying to force local police forces, local communities to do something against their will was going to create a great deal of animosity.
"It would probably have meant a defeat in Parliament on the orders. And a huge animosity from local politicians on the police authorities.
"That wasn't the best way to proceed. The best way to proceed was by discussion and dialogue."
He said forces could still merge voluntarily. Those that opposed mergers, he hoped would talk to each other and to Home Office Minister Tony McNulty to find ways of working more closely together.
Law and order
Today's announcements will focus on ensuring people feel the criminal justice system is on their side.
But Dr Reid revealed he was still trying to convince Gordon Brown to fund an expansion of the prison system, so criminals could be kept inside for longer.
"I have tried to listen to the public. Many feel the criminal justice system is too much on the side of the offender and not enough on the side of the lawabiding majority.
"Prisons are something I am looking at. I know what I want.
"There is always a great demand for public finance but I am in discussions with The Chancellor and the Treasury on this. We haven't made a decision as yet."