A surge in street robberies to nearly 100,000 a year is revealed in the annual crime figures published today, denting John Reid's hopes that a "rescue plan" will restore public confidence in his beleaguered department.

The 8% rise in street crime follows the ending of Tony Blair's 2001 initiative which pumped millions of pounds into fighting muggers after the prime minister took a personal lead on the issue.

Official Home Office statistics show violent crime rose 2% to more than 1.2m offences, though overall rates of crime remained stable. Drug offences also rose 23%, largely driven by an increase in cannabis possession offences, but government analysts put this down to an increase in formal warnings which police have been giving since the drug was downgraded to class C.

There was better news on house burglary, which fell 7%, and murder, which is at its lowest level since the 60s.

The Association of Chief Police Officers described the increase in violent crime as a concern, but its spokesman on crime, Ian Johnston, thought the overall outlook was positive.

Scotland Yard said the rise in muggings in London, a significant part of the overall increase, was down to growing numbers of young people carrying mobile phones and music players, and handheld computers. Commander Simon Foy said: "We had a consistent problem last year with robbery. We know we have got a problem and we have done quite a lot about it."

The figures come a day after Mr Reid announced radical plans for his department, and ahead of further overhauls of the criminal justice system due to be announced today. The home secretary will try to maintain the momentum by confirming a further 8,000 prison places to cope with record jail numbers. He will also try to meet public concerns over sentencing and released prisoners by insisting that all parole board decisions be unanimous and saying he will tackle problems thrown up by the Human Rights Act.

He will back the extension of the "community courts" based on the model in north Liverpool where a judge works closely with the local community. Mr Reid told the Commons he was determined to deliver a confidently led and well managed Home Office but conceded it would take "unglamorous hard work". That process began yesterday when he revealed proposals to revamp the department, including a purge of senior managers, with a quarter of them - 15 directors - being moved out of their jobs immediately.

His top 250 senior civil servants will have to go through skills assessments by September to see if they are up to the job.

The Home Office is to be slimmed down with 3,300 more headquarters jobs going by 2010 in attempt to turn it into a smaller, more responsive strategic centre, leaving decisions on operations and casework to individual services. The immigration service is to become a semi-independent agency. Mindful of the clashes between Michael Howard and his prisons boss, Derek Lewis, Mr Reid said it was impossible to completely separate policy and operations but he hoped ministers would resist the temptation to routinely interfere.

Shadow home secretary, David Davis, predicted the reform package was not up to the job: "The Home Office is a department in severe crisis as a direct result of government policy. The failures are multiple, massive and have serious impact on the public."