Angela Rayner and Andy Burnham have fuelled speculation about a challenge to Keir Starmer after being spotted holding secret late-night talks.
Greater Manchester mayor Mr Burnham was seen leaving Ms Rayner’s constituency home in the city late on Friday, days after they played happy families with the PM on the campaign trail.
Ms Rayner is seen as a leading candidate to run for the leadership if Sir Keir is challenged in the wake of a poor showing in the May 7 local elections.
This is despite the fact that she is still awaiting the results of an official HMRC probe into the tax she paid when buying an £800,000 holiday home 250 miles from her constituency last year.
And Mr Burnham has made little secret of his desire for the top job, having seen one attempt to return to Westminster thwarted by Sir Keir already this year, when he was blocked from running in the Gorton and Denton by-election.
Because he is an MP he has no realistic chance of being in the frame if there is a challenge next month, but his backing for Ms Rayner would carry a lot of weight in Labour circles.
Their pow-wow at Mr Rayner’s home in her Ashton-under-Lyne seat came five days after they appeared alongside Sir Keir on a visit to Greater Manchester, sharing a joke as they sat with schoolchildren.
However the meeting came amid the fallout from the latest round of revelations about how Lord Mandelson was appointed ambassador to the United States despite a close friendship with paedophile Jeffrey Epstein.
The Prime Minister is facing a new wave of calls to step down after it was revealed Mandelson was approved for the role despite red flags on his security vetting.
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A Labour MP told the Sun: ‘They will be carving it up. If Andy endorsed Angela for leader, that will sway a lot of MPs to back her.
‘Then she could get him a seat in Parliament and bring him straight into Cabinet.’
Allies of the pair denied the meeting was set up to work on a leadership challenge.
Some MPs have played down the chances of a leadership move against Sir Keir, believing it would look bad after just two years in power, especially while Trump’s war with Iran is hammering consumers.
Last week Ms Rayner was said to have cooled on her plan to move against her former boss, instead focusing on helping the local election campaign.
But the Mandelson scandal could push more to the edge.
This week former minister Louise Haigh will speak at a conference to urge a major revamp of council tax and stamp duty that will place pressure on ministers to act.
She will speak at the Good Growth Group’s National Growth Debate on Tudesday.
Liberal Democrat leader Sir Ed Davey said that Sir Keir Starmer is a ‘big part of the problem’ for Labour MPs.
Sir Ed told Sky News’s Sunday Morning With Trevor Phillips programme that Sir Keir has shown ‘catastrophic misjudgment’ on ‘many levels’.
He said: ‘The thing that I think Labour MPs should think about quite carefully now is their Government has been a bit of a failure, frankly, on the economy, on so much, and it’s in chaos, in the way that Conservatives were in chaos, in perpetual crisis, and I don’t think they can get out of that unless Keir Starmer moves aside.
‘And if they don’t, there’s a real danger they’re handing the keys to Number 10 to Nigel Farage, who can benefit from this chaos.
‘So I would really say to Labour MPs, who in many ways, have the future of the Prime Minister in their hands, that they really now have to accept, the Prime Minister is a big part of their own problem and in the context of the threat that Nigel Farage poses to our democracy and to our country with his divisive Trump-like politics, I think the Labour Party has to realise they have to move on.’
