Clarke returns to shadow cabinet in Cameron's large-scale reshuffle
In a wider-than-expected reshuffle, Mr Clarke was made shadow business secretary to take advantage of his "heavyweight" credentials.
Eric Pickles was promoted from Communities and Local Government to Tory party chairman, swapping jobs with Caroline Spelman – who retains her shadow cabinet status despite being under the shadow of a sleaze investigation.
The main loser appeared to be Peter Ainsworth, who was replaced as shadow environment secretary by Nick Herbert.
Dominic Grieve was moved from home affairs to justice – where the leadership expects he will be able to capitalise on his background as a barrister.
His responsibilities are assumed by Chris Grayling, who has earned widespread praise for his handling of the complex work and pensions brief.
Theresa May now assumes that role, while Alan Duncan takes over from her as shadow Commons leader.
Announcing the changes, Mr Cameron said he now had the "strongest possible Shadow Cabinet" ready for a General Election.
"With Ken Clarke's arrival, we now have the best economic team," he said.
"With the other changes I have made today, we have combined fresh thinking with experience, hope and change with stability and common sense."
The full membership of the new shadow cabinet announced by the Conservative Party today:
Leader of Her Majesty's Official Opposition & Leader of the Conservative Party, Rt Hon David Cameron MP.
Leader of Her Majesty's Official Opposition in the House of Lords, Rt Hon Lord Strathclyde.
Shadow Foreign Secretary, Rt Hon William Hague MP.
Shadow Chancellor of the Exchequer and General Election Campaign Coordinator, George Osborne MP.
Shadow Secretary of State for Energy and Climate Change, Greg Clark MP.
Shadow Secretary of State for Business, Enterprise and Regulatory Reform, Rt Hon Kenneth Clarke QC MP.
Shadow Leader of the House of Commons, Alan Duncan MP.
Shadow Secretary of State for Defence, Dr Liam Fox MP.
Shadow Minister for Europe, Mark Francois MP.
Shadow Secretary of State for Wales, Cheryl Gillan MP.
Shadow Secretary of State for Children, Schools and Families, Michael Gove MP.
Shadow Home Secretary, Chris Grayling MP.
Shadow Secretary of State for Justice, Dominic Grieve QC MP.
Shadow Chief Secretary to the Treasury, Philip Hammond MP.
Shadow Secretary of State for Environment, Food & Rural Affairs, Nick Herbert MP.
Shadow Secretary of State for Culture, Media and Sport, Jeremy Hunt MP.
Shadow Secretary of State for Health, Andrew Lansley MP.
Chairman of the Policy Review & Chairman of the Conservative Research Department, Rt Hon Oliver Letwin MP.
Shadow Minister for the Cabinet Office and Shadow Chancellor of the Duchy of Lancaster, Rt Hon Francis Maude MP.
Shadow Secretary of State for Work and Pensions and Shadow Minister for Women, Rt Hon Theresa May MP.
Opposition Chief Whip, Rt Hon Patrick McLoughlin MP.
Shadow Secretary of State for International Development, Andrew Mitchell MP.
Shadow Secretary of State for Scotland, David Mundell MP.
Shadow Security Minister & National Security Adviser to the Leader of the Opposition, Baroness Neville-Jones of Hutton Roof.
Shadow Secretary of State for Northern Ireland, Owen Paterson MP.
Chairman of the Conservative Party, Eric Pickles MP.
Shadow Minister for Housing, Grant Shapps MP.
Shadow Secretary of State for Communities & Local Government, Caroline Spelman MP.
Shadow Secretary of State for Transport, Theresa Villiers MP.
Shadow Minister for Community Cohesion & Social Action, Baroness Warsi of Dewsbury.
Shadow Secretary of State for Innovation, Universities and Skills, David Willetts MP.
Chief Whip in the House of Lords, The Baroness Anelay of St Johns (attending Shadow Cabinet).