Senior allies of Andy Burnham believe they have succeeded in preventing Ed Miliband from becoming chancellor, amid concerns the Energy Secretary would become a "lightning rod for criticism" of the new government.
The Times reports that three figures close to the prime minister-in-waiting believe Burnham has been persuaded not to hand Miliband the Treasury brief when he unveils his Cabinet next week.
Home Secretary Shabana Mahmood is understood to be the frontrunner, although a source insisted no final decision has been made.
The report says Burnham’s allies have raised concerns over Miliband’s opposition to new North Sea oil and gas licences, an issue on which Burnham has taken a more pragmatic stance.
One ally said: “the tide has turned against Ed”, while another added: “it looks like the right outcome has been reached”. A third said: “Ed would have been a lightning rod for criticism. He is out of the running.”
According to the newspaper, Jonathan Reynolds is expected to return as business secretary, while Louise Haigh and Lucy Powell are also being considered for senior Cabinet roles. Burnham is due to enter Downing Street on July 20.