Andy Burnham is reportedly set to remove Rachel Reeves as Chancellor if he becomes PM. Sources close to him said he would offer her an alternative Cabinet role.

Energy Secretary Ed Miliband, former health secretary Wes Streeting, Foreign Secretary Yvette Cooper and Home Secretary Shabana Mahmood have been tipped as potential candidates to replace her in 11 Downing Street. An ally of Ms Reeves told the Financial Times: “Rachel would like to be Chancellor, but ultimately she wants to serve in a Labour Government.”

Mr Burnham, who has returned to Parliament after winning the Makerfield by-election, could enter No 10 within weeks if no one else runs in the Labour leadership race.

Sir Keir Starmer met his likely successor on Tuesday for face-to-face talks.

Mr Burnham will also start receiving Government briefings to prepare for power after Sir Keir authorised Civil Service access talks to begin for “prospective candidates” for the Labour leadership.

The Prime Minister told his Cabinet he wanted an “orderly transition” and insisted he would try to make the process “as easy as possible” for his successor.

The former Greater Manchester mayor will begin to set out his policy platform by pledging economic growth and committing himself to Labour’s existing fiscal rules in a speech next week.

Downing Street said no “major” new policy decisions or spending pledges would be made in the coming weeks.

But the delayed defence investment plan, which sparked John Healey’s bombshell resignation as defence secretary, is still outstanding.