Andy Burnham has warned Labour MPs they have a “final chance to change” after sweeping to victory in the Makerfield by-election and setting the stage for a leadership challenge against the Prime Minister.

Allies of Burnham called on the Prime Minister to hand over power after he bucked a national slide in Labour’s popularity to increase the party’s share of the vote, in a seat where Nigel Farage’s Reform UK made big gains in last month’s local elections.

Burnham defeated Reform UK’s Robert Kenyon by 9,231 votes, up from 5,399 in 2024, and Labour’s vote share increased by 9.61 per cent.

The Prime Minister has insisted he will not quit and intends to fight any leadership challenge.

In his victory speech Burnham urged his party to act now, saying there would be no second chance.

“Everyone knows that politics isn’t working. Everyone can feel that the country isn’t where it should be. Tonight could, just could, be the turning point,” he said.

In a direct warning to Labour MPs he said: “I do say to my own party: this is a final chance to change.

“This is what people said directly to me on the hundreds of doorsteps that I stood on. We must hear it, we must act upon it and we must get it right. There will be no second chance.”

Burnham’s win marks a return to parliament for the former New Labour minister, who served in the cabinets of both Tony Bair and Gordon Brown before leaving Westminster for the Manchester mayoralty.

Cabinet minister Lisa Nandy said she wanted Mr Burnham “back at the top table”.

The Culture Secretary said: “What Andy’s shown here is that there is something that he brings, a willingness to go out and fight for the change that people need, to take on any system and any person who stands in the way and to be bold and to wear his heart on his sleeve, and people have responded.”

Former cabinet minister and Burnham ally, Louise Haigh, urged the Prime Minister to set out an “orderly and managed transition” of power.

A potential Burnham leadership has unsettled some investors. Peel Hunt deputy head of research Kallum Pickering said the risks were “skewed to the downside” for financial markets if Burnham wins given traders would fear a shift to a leftist agenda “without a fresh electoral mandate”. 

Additional reporting by PA Media