Senate Appropriations Chairman Robert Byrd’s decision Friday to surrender his gavel at the end of the 110th Congress will set off a wholesale reshuffle of committee chairmen from the most powerful to the least.

While the West Virginia Democrat is relinquishing perhaps the most influential panel in Congress given its power of the purse, Majority Leader Harry Reid (D-Nev.) is trying to push Homeland Security and Governmental Affairs Chairman Joe Lieberman (ID-Conn.) into a “lesser committee” chairmanship, a Lieberman aide said.

Though the aide declined to specify which committee Reid offered, Lieberman is in line to take over the Small Business and Entrepreneurship Committee — one of the lowest- profile panels. The chairman of that committee, Sen. John Kerry (D-Mass.), is expected to take over the Foreign Relations Committee from the outgoing chairman, Vice President-elect Biden. If Lieberman takes over the Small Business panel, Sens. Carl Levin (D-Mich.) and Tom Harkin (D-Iowa) would have to pass on the gavel, which is likely because both chair more powerful panels.

Beyond Lieberman’s seniority on Small Business, aides suggested Reid might have offered him Veterans’ Affairs or plum subcommittee chairmanships on other panels. Reid is moving to strip Lieberman of the Homeland Security post as punishment for supporting Sen. John McCain’s (R-Ariz.) presidential campaign as well as for aggressively criticizing President-elect Obama.

Although Lieberman has not rejected any offer and told reporters last week that he was reviewing his options, he still aims to keep the Homeland Security post and argued in his meeting to Reid that he has been a loyal Democrat in other ways. Lieberman also has not ruled out switching parties if Democrats strip him of his chairmanship. Minority Leader Mitch McConnell (R-Ky.) reached out to Lieberman last week, according to aides.

If Lieberman is forced to give up his chairmanship, Sen. Daniel Akaka (D-Hawaii) would likely take that job. Akaka’s chairmanship of the Veterans’ Affairs Committee would probably be filled by Sen. Patty Murray (D-Wash.).

The 90-year-old Byrd’s surprise decision to relinquish his hold on Appropriations came after Democratic leaders maneuvered to push him out. Because of his age and frailty, Byrd has had difficulty managing his committee duties.

In a statement, Byrd said, “I want to stress that this is a decision I made only after much personal soul searching, and after being sure of the substantial Democratic pickup of seats in the Senate. I am now confident that stepping aside as Chairman will not adversely impact my home state of West Virginia. God willing, I will continue to serve on the Appropriations Committee. I will continue to chair the Homeland Security Subcommittee.”

Byrd’s exit opens the chairmanship to Commerce, Science and Transportation Chairman Daniel Inouye (D-Hawaii). Reid confirmed that move Friday.

Sen. Jay Rockefeller (D-W.Va.) is expected to take over for Inouye on Commerce, leaving his chairmanship of the Intelligence Committee to Rules and Administration Chairwoman Dianne Feinstein (D-Calif.).

Feinstein addressed speculation that the committee shuffle would put her in a position to chair Intelligence in a statement Friday: “If Senator Byrd’s resignation means that I will chair the Intelligence Committee, I would welcome the responsibility, and I am prepared to address the great challenges facing our nation. I believe that strong oversight of the intelligence community is critical to ensuring our national security, and to restoring America’s reputation in the world.”

The Rules gavel would then likely fall to Sen. Charles Schumer (D-N.Y.).