Sir Keir Starmer could sensationally stand aside for Manchester Mayor Andy Burnham if he sweeps back to Parliament as an MP next month.
Publicly, Downing Street is insisting the PM will not stand down and will fight on despite around 100 Labour MPs calling for him to go.
But, following a bruising week for the Prime Minister with potential leadership candidates beginning to jostle for position, he is said by loyalists to be 'much less defiant' about staying in power.
The embattled premier is believed to be spending the weekend at his grace and favour countryside home Chequers 'in the bunker' considering his options while Labour sources question whether he can 'keep going'.
Yesterday Mr Burnham was cleared by Labour's ruling body the NEC to stand as a potential candidate in the Makerfield by-election in Greater Manchester paving the way for the popular Labour figure's return to Parliament.
The party's official candidate will be chosen next Thursday but he is expected to be chosen.
The ruling followed expected leadership challenger Wes Streeting's resignation as Health Secretary on Thursday criticising Sir Keir's premiership as being a 'vacuum' without 'vision'.
However, Mr Streeting's critics reported he then delayed challenging the PM immediately because he did not have the support of the 81 MPs required to mount a leadership challenge, which was denied by those loyal to him.
Sir Keir Starmer is pictured with Sadiq Khan and Met Police commander Clair Haynes, during a visit to a police station in Lambeth, south London, on Friday
Greater Manchester mayor Andy Burnham was spotted running in Warrington on Saturday morning
Nevertheless while Blairite Streeting is likely to be the main contender for any challenge from the right wing of the Labour Party, Burnham is now expected to unite the left.
Mr Streeting could give his first public comments today on his resignation as he gives the keynote speech at the Progress think tank's 2026 conference.
Former Deputy Prime Minister Angela Rayner and Energy Secretary Ed Miliband, both touted as potential leadership candidates themselves, are expected to throw their lot in with any challenge from Andy Burnham.
The PM has said he wants to avoid the 'chaos' that would be caused by an open leadership race, meaning he could resign if Mr Burnham is the only candidate in any leadership challenge.
However, this would be unlikely if Mr Streeting does throw his hat into the ring.
Ministerial sources say 'all options' are being considered while the PM is being urged not to announce a resignation before the by-election which could trigger a succession 'free-for-all'.
A Cabinet minister loyal to the PM said: 'We need to avoid chaos here. The second he does that, all bets are off. There will be the pro-Andy camp, the anti-Andy camp, the 'anybody but Wes' camp, the fake unifiers, the Al Carns ego faction. It all comes out and no one has control over anyone.'
While they said it was not Sir Keir's 'personality' to be 'defiant', the minister told yesterday's Telegraph: 'I think he is trying to feel his way through what is the most responsible way forward here for the country and it is all about stability. He is very much an all-options-on-the-table type of person.'
Wes Streeting, who resigned as Health Secretary on Thursday, is likely to be the main contender for any challenge from the Right wing of the Labour Party
Former deputy Labour leader Angela Rayner is also expected to throw her hat in the ring after announcing that she had been cleared by HMRC over her tax affairs
Another government minister suggested the timetable for the Prime Minister's departure could be to resign ahead of the Labour Party conference in September.
The Makerfield by-election is expected to be held on June 18, the anniversary of Napoleon's defeat in the Battle of Waterloo as highlighted in today's Daily Mail.
Mr Burnham was blocked in an earlier bid to return to Parliament when Sir Keir blocked him from standing in the Gorton and Denton by-election in January.
Nevertheless a win for him in Makerfield, which would then see him eligible to challenge the PM as an MP, is not assured.
A tough fight is expected with Reform UK following its success in the recent local elections. The party easily outpaced Labour in neighbouring wards to Makerfield signalling strong support for Nigel Farage's party in the region.
Reform UK is holding interviews for its own candidate for the ward next week with Mr Farage warning the party would 'throw everything we can at this by-election'.
Meanwhile it is being suggested that the PM could fight back against his rivals next week by finally confirming long-awaited defence spending plans, announcing an £18 billion increase in budgets.
For months, the government has delayed detailing how it will fund the significant spending required to upgrade the armed forces outlined in last year's Strategic Defence Review.
But Sir Keir is now said to be preparing to announce the promised defence spending increase at last.
Any announcement comes amid increasing concerns the UK is woefully unprepared for any conflict.
It is also being seen by colleagues as a powerful public push back against potential leadership challengers amid the ongoing machinations of their allies and opponents.
It follows the UK being shamed by President Trump on the international stage for the parlous state of its navy when called upon to support the US in the Iran War.
Allies of the PM are keen for him to avoid any repeat at the forthcoming NATO summit in Ankara in Turkey in July where the two will come face to face.
Insiders say national security adviser Jonathan Powell has warned the PM that Britain has fallen down the NATO league tables for defence spending and urgently needs a significant increase in spending to stand any chance of being respected in world affairs.
The UK has tumbled down the spending league compared to our allies from third place in 2021 to 12th place last year, according to NATO data.
Mr Powell has apparently urged him to invest now and modernise the armed forces with a significant investment in hardware like jets as well as in advanced technology.
According to sources, Mr Powell has advised the PM that £18 billion is required to fund the investment deemed necessary by the Strategic Defence Review.
Cabinet secretary Dame Antonia Romeo is also said to have urged the PM, who has continually pledged to put defence and security at the heart of his premiership, promising a spend of 3 per cent of GDP on defence in the next parliament, to increase defence spending as a priority.
Defence Secretary John Healey is also believed to have pushed for a significant increase in defence spending.
The UK spends just 2.4 per cent of GDP on defence at present.
However it is still unclear how any £18 billion increase in defence spending will be funded although it is expected to be spread over the next four years.
A second option of £12 billion is also said to have been considered but is believed to already have been dismissed while Chancellor Rachel Reeves was known to have only wanted to commit £10 billion towards defence.
A Whitehall source told today's Times that an £18 billion spend would be 'fully affordable' under the plans being signed off.
The £18 billion would enable the MoD to fulfil all of the 62 recommendations in the strategic defence review, it is understood.
This includes pushing ahead with the Global Combat Air Programme (GCAP) fighter jet programme, shipbuilding, buying new F-35A jets to carry nuclear weapons, stockpiling munitions and buying novel weapons to make forces more lethal.
A senior military source said it was 'great the government is taking defence seriously' but the MoD 'needs to really get on top of how to leverage money from the private sector if we are going to be ready to fight a war'.
A government spokesman said: 'The defence investment plan will deliver the best kit and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy. We are working to finalise the plan and it will be published as soon as possible.'