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David Miliband is to stun Parliament by stepping down as an MP tomorrow to take up a “dream job” in New York.

The former Foreign Secretary - and brother of Labour leader Ed - intends to make the shock announcement tomorrow morning.

The Mirror understands he intends to step down with immediate effect, triggering a by-election in May.

He is thought to have confided in just a handful of close allies about his decision.

Ed Miliband spoke to his older brother for a “little while” after he told him he was leaving.

The Labour leader was reported to have wished him well with “sadness”.

A source close to Mr Miliband, who has been MP for South Shields since June 2001, confirmed he would step down tomorrow.

“David has landed a dream job in charge of a charity in New York and wants to take it,” said the source.

“But it means leaving politics.”

It is believed he will take up a senior role with the charity International Rescue Committee with immediate effect.

His departure will be seen as a major blow to the right of the Labour Party.

But it will be a major boost to his brother Ed who will now no longer have to look over his shoulder at a possible leader in waiting.

The dramatic announcement brings to a close a Parliamentary career which turned on the key battle for the Labour leadership more than two years ago.

In September 2010, David missed out on taking over as party leader by the tightest of margins to his brother.

Despite being early favourite, he got 49% of the votes against Ed’s 51%.

Although he was backed by the majority of MPs and party members, he lost when the union vote swung behind his brother.

(Image: PA)

Offered the shadow Chancellor job at least twice in the early days of his brother’s leadership, he turned it down to take a role on the back benches.

It was a far cry from his high profile career at the centre of Labour politics which saw him work with Tony Blair in Downing Street before becoming an MP in 2001.

After the 2005 General Election, the Prime Minister promoted him to the Cabinet with responsibility for Communities and Local Government; in 2006, he became Secretary of State for Environment, Food and Rural Affairs.

In June 2007, David was appointed Foreign Secretary by Prime Minister, Gordon Brown.

He is married to American violinist Louise Shackelton, and they have two children.

In the past two years, he has made just short of £1million on top of his MP’s salary.

In recent weeks, it had been suggested he might make a return to the Labour front bench.

Ed Miliband said he would welcome his brother’s return to the shadow cabinet.

“With his talent, what he has to offer, it would be wrong for the door not to be open,” he said.

The Labour leader said his older sibling had spent the past two years “on the front line, not on the front bench’.

But he appears to have lost his appetite for a high profile role on the political front line.

South Tyneside council leader Iain Malcolm would be one possible contender for the safe Labour seat, won with a majority of 11,109 at the 2010 election.

Much of his time in recent months has been spent on his lucrative directorships and speaking roles.

He has worked extensively with VantagePoint Capital Partners, a Californian group; Oxford Analytica, a UK advisory company; and Indus Basin Holdings, a Pakistani agrochemical group.

He is also a member of the advisory board to the Sir Bani Yas academic forum, which is hosted by the Ministry of Foreign Affairs of the United Arab Emirates.

Despite supporting Arsenal, Mr Miliband is vice-chairman and a non-executive director of Sunderland Football Club.

As a speaker he commands a fee of up to £20,000.

His earnings since leaving Government total £985,315 including travel and accommodation for himself and his staff, according to the most recently published Commons register.

That amounts to more than six times his earnings through his salary as an MP.

* Click here for all the reaction from MPs after Mr Miliband's shock decision.