The BBC reports. This is big. More soon.
UPDATE: Nick Robinson says that Purnell wants to force a leadership batle, and calls on Brown to stand down. Tomorrow's Sun and Times carry his resignation letter. Apparently, Purnell "isn't seeking the leadership". The quotes that Robinson read out make this sound like a bit of a Howe moment
UPDATE 2: Just to catch up with some other stories: Flint is staying, and it sounds as though Darling is digging his heels in over the Chancellorship.
UPDATE 3: Over at Comment Central, Danny Finkelstein and Philip Collins chat about the Purnell resignation. They've clearly read the letter early, and this point by Finkelstein is worth pulling out:
"...that is where Purnell's letter is very smart. He makes it plain he has no leadership ambitions and that he is not acting with others. That's very important and heads off the factional [Blairite vs Brownite] fight argument [that Brown may try to deploy]. I don't think this argument will run.
I'm sure Brown will try it but there are both too few Blairites to make a real plot and too many other people who know that what James Purnell has said is true." UPDATE 4, 2213: Fraser's on Sky giving his take on all this.
UPDATE 6: According to the Guardian's source, Purnell has been planning this for weeks:
"'He [Purnell] has made the decision in the last few weeks – he's always been very loyal and defended the prime minister, but he now feels he can no longer go out and defend the prime minister. That is why he has taken the difficult decision to resign'"