Former Deputy Prime Minister Angela Rayner is said to be "getting her ducks in a row" for a leadership challenge against Sir Keir Starmer.
Ms Rayner, who was also the Housing Secretary, is understood to be offering Cabinet roles to MPs in exchange for their support.
According to The Telegraph, a source familiar with the former Deputy Prime Minister's moves said Ms Rayner was "on manoeuvres" and was "getting her ducks in a row" for a leadership challenge.
The source added: "The unions will back her and help her".
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Ms Rayner has joined Tribune - a pressure group of MPs on the soft Left of the Labour Party.
The group's senior figures say there is about 70 members.
However, they say it is on course to reach 100 members which would make it the largest caucus of Labour backbenchers.
The group could be used to launch a leadership challenge in the future.
Angela Rayner could be paving the way for a leadership challenge against Sir Keir Starmer
| PAMs Rayner resigned from her Cabinet roles in September after The Telegraph reported she did not pay £40,000 of stamp duty on the purchase of a flat in the seaside town of Hove in East Sussex.
However, those close to the former Deputy Prime Minister believe she is ready to make a political comeback.
Those on the Left of the party have favoured her over other contenders, including Health Secretary Wes Streeting.
An early challenge could favour candidates like Ms Rayner and in turn, disadvantage figures like Greater Manchester Mayor Andy Burnham - who is currently not an MP.
Keir Starmer is facing internal pressure in the Labour Party | REUTERSLATEST DEVELOPMENTS:
A source close to Ms Rayner has dismissed the claims as "total rubbish".
They insisted she was "focused on representing her local community".
Instability within the Labour Party came to a head last week when Downing Street attempted to stifle a perceived leadership threat.
It comes as Clive Lewis became the first Labour MP to call for Sir Keir to step down.
The Norwich South MP demanded the leadership change on Friday night, saying Mr Burnham should return to the parliamentary Labour Party and "step up and become the next Prime Minister".
No 10 had previously briefed journalists that he would fight any attempt to kick him out and that removing him would hurt the markets.
The move backfired and one Labour MP said the past week had been a "complete shambles".
"After this last week, everyone is just completely fed up with it all," the MP said.
Another backbencher added that the leadership of the party was "in complete disarray".
The MP said there were many Labour politicians who were worried about their seats and the direction of the Government.
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