Angela Rayner has told Labour MPs she is ready to replace Sir Keir Starmer despite still being under investigation following a tax dispute.
The former Deputy Prime Minister indicated that she would back Greater Manchester Mayor Andy Burnham if he ran a leadership campaign.
However, Labour insiders have said she is still rallying MPs for support for her own leadership bid if Sir Keir is forced to step down at short notice.
One Labour source told The Daily Mail: “Publicly she is making very loud representations that Andy should be allowed back. But she is also texting everyone, saying she is ready to go.”
The source explained that Ms Rayner would have to “row in behind” Mr Burnham if he manages to become an MP again.
However, they said if the Greater Manchester Mayor cannot figure out a route to leadership in time, then Ms Rayner will likely take the opportunity herself.
Ms Rayner was forced to quit the Cabinet last year after it was revealed she had not paid £40,000 in stamp duty on an apartment some 250 miles away from her Ashton-under-Lyne constituency in Hove.
HMRC is currently investigating the case, but her allies believe she will be cleared of any wrongdoing and the probe will not be an obstacle to her leadership bid regardless.
Angela Rayner is currently being investigated by HMRC over her tax affairs when purchasing a luxury property in Hove
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They also believe that due to Ms Rayner’s popularity among Labour membership, she would stand as a strong contender against the Health Secretary Wes Streeting, who is rumoured to be preparing to launch his leadership bid.
The Ashton-under-Lyne MP launched a scathing attack yesterday against Sir Keir, declaring that Mr Burnham should “not have been blocked” from running in the Gorton & Denton by-election earlier this year.
She said: "So let me be honest conference. We as a party have to do better than this. And we can only prove we mean our Labour values by putting the common interest ahead of factionalism.
"And we can start by accepting that Andy Burnham should never have been blocked. It was a mistake that the leadership of our party should put right."
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Just under a month ago, the Prime Minister cosied up to Ms Rayner and Mr Burnham for a photo opportunity in Ashton-under-Lyme in Greater Manchester
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It is understood that she has signed a non-aggression pact with the Greater Manchester Mayor, pledging not to stand against him if he is able to return to Westminster.
Polling, however, suggests Ms Rayner may struggle with the wider electorate.
A YouGov poll published last week suggested 56 per cent of the public have an unfavourable view of the former Deputy Prime Minister, compared to 21 per cent holding a favourable one.
However, Mr Streeting’s supporters have cast doubt on Ms Rayner’s success in a leadership contest, warning her tax affairs would not sit well with the electorate after Sir Keir has been in the throes of a scandal himself following the appointment of Lord Mandelson.
One source said: “Do people really want to replace one scandal-hit leader with another?”
Other MPs in rival factions have weighed in, questioning her suitability for the role after she was spotted falling into a door after a long night of socialising at Westminster’s Strangers Bar.
One MP said the incident had “reopened all the old questions” about whether she has got what it takes to be Prime Minister.
Ms Rayner, who published a mini-manifesto on Sunday, is putting pressure on the Prime Minister to “meet the moment” with more radical action to tackle inequality in the UK and dwindling living standards among ordinary people.
She claimed the action can be taken “within the current fiscal rules”.
In her 1,000-word manifesto, Ms Rayner called for raising the minimum wage further and greater powers to be handed down to regional mayors to make economic decisions.