What skills and qualifications would one need if looking to move laterally into a Game Designer position? I've done Audio Design for 4 years for a variety of companies and would love to be considered for game design roles, but I've felt quite pidgeon holed in Audio. I feel the design skills from Audio are quite transferable, but I'm not sure how to market myself for Game Design roles.

What should I be looking to do?

The job of Game Designer requires considerable experience embedded within a development team, during which time the candidate has proven time and again that s/he has what it takes. You say you've done audio for games for 4 years - for a variety of game companies. Was that experience embedded within the dev team throughout the design process? Or were you working freelance, brought in after the design itself was already determined?
You probably need to get hired within a dev team, full-time, and work during the entire process of a couple of games. This article might help: "Playing the Upgrade-to-Designer Game"

As Tom pointed out most game design positions require that you have worked on a team from start to finish at least once and know the development process. Game designers also need great communication skills as you have to explain to programmers how to implement your ideas. Having references from people in the industry is a plus as well, can you get them from your previous employers.

Also having a few Game design docs written up to show your skills is a plus.

Make sure they are easy to read and explain things in depth so anyone reading it can understand your ideas.

When going into an interview look at the things the job will require and make note to at least understand how those things work.

Areas of game design you can look into.

- AI
- User Flow
- Monetization
- Story Development

- UI design

Also I would suggest you look into learning how to program as this is always a + for a game designer as you are usually required to do some sort of scripting.