This potentially sounds like a redundancy under a different name. If there is a reduction in the requirement within the business for someone to carry out work of that particluar kind then this is a redundancy situation and you should be consulted as such. If made redundant you would be entitled to a statutory redundancy payment. If as suspected this is not a genuine redundancy situation then if dismissed you could bring a unfair dismissal claim.

Another issue is that by adding to your duties extensively your employer is effectively altering your contract of employment. Any alteration of terms should be agreed with an employee first. To unilaterally alter your terms (i.e. to do so without consent) is potentially a breach of contract.

To clarify matters you may wish to raise a formal grievance stating that you are unhappy/confused by the current proposals. I think you may wish to ask if the company consider this to be a redundancy of your current role or simply an alteration of contract (expansion of job description) and ask why you are being forced to reapply for your role. You may wish to state that you are happy to discuss extra functionality along with their proposals for retraining and support in acheiving the level they require.
The whole situation sounds a little bizarre and I think you need written confirmation of what their intentions are to protect you if the matter escalates.