Used predominantly within the British media to describe a sudden reversal in a newspaper or other organisation’s editorial line on a certain issue. Generally, this will involve no acknowledgement of the previous position.
The phrase is based on the (now banned) northern English sport of ferret legging, where contestants compete to see which of them can endure having a live ferret sealed inside their trousers the longest.
It originates from Kelvin MacKenzie’s time as editor of The Sun. His way to describe how journalists should approach public figures was to say journos should “stick a ferret up their trousers,” meaning to make their lives uncomfortable.
When it became clear that the tide of public opinion had turned against the paper’s line, MacKenzie would burst from his office and order editorial staff to “Reverse Ferret!”
(Adapted from Wikipedia)