A former Treasury chief appeared to warn Andy Burnham against making Ed Miliband his chancellor.

Darren Jones was a close ally of Sir Keir Starmer but has rowed in behind the would-be prime minister after ruling himself out of a Labour leadership contest.

Also a former number two to Chancellor Rachel Reeves, he revealed that he has been reassured by Mr Burnham about his plans for the economy.

But he declined to say whether controversial Energy Secretary Mr Miliband should be put in charge of the Treasury or whether he would meet 'the tests I think need to be met' to succeed in the role.

Mr Miliband is seen by many as the frontrunner for the job.

Mr Jones – who is still serving as Chief Secretary to the Prime Minister – also claimed the public purse strings would be loosened in a Burnham government. 

His comments echo those of an economic adviser to the former Greater Manchester mayor, Lord O'Neill, who called for billions of pounds of borrowing to pay for major infrastructure projects.

Mr Miliband spent five years as a special adviser to Gordon Brown in the Treasury, has a Master's degree in economics and taught the subject at Harvard. 

However many Labour MPs, trade union bosses and business leaders fear the prospect of him moving into No 11.

He would seek to hike taxes on the wealthy, having campaigned for a mansion tax and the restoration of the 50p rate of income tax when he was party leader in the 2010s. He would also likely target businesses, having previously branded some firms 'predators'.

And he would push his Net Zero drive, which critics say is killing heavy industry by keeping energy prices high as well as destroying jobs in the oil and gas sector. 

Mr Jones, who as chief secretary to the Treasury during Labour's first year was in charge of the crucial spending review, said he would not join a Labour leadership race despite 'upwards of 100 MPs' opposing a Burnham coronation or feeling 'depressed' about Sir Keir being ousted.

In an interview with Sky News, he suggested many Labour MPs had wanted him to run because he would keep public spending and borrowing under control – and said he had broached this in a meeting with Mr Burnham this week. 

Asked what MPs' concerns were, Mr Jones replied: 'Their concern is, well, who is Andy going to appoint as chancellor? What does that mean for the trust that we have won from the public on the economy?'

He said that although Labour MPs share Mr Burnham's interest in building council houses and having more control over public utilities, 'economic stability' must be maintained and there is a 'risk' in 'just saying you're going to borrow lots of extra money' because it adds to debt interest payments.

'I think there's room to borrow a little bit more', he added, but said it would not work to simply give money to councils for new homes because there aren't sufficient builders or bricks.

Asked what his view was of his Mr Miliband becoming Chancellor, Mr Jones said he was 'not going to get into personalities' but added that any candidate would have to be able to 'enable the delivery of the prime minister's priorities and not try to control the prime minister'.

They would also have to be able to 'reassure the markets, reassure the trade unions and reassure the Parliamentary Labour Party and, by extension, the public', he said.

Asked if Mr Miliband would fall short on his criteria, Mr Jones said: 'Well, I will let you mark those tests, but those are the tests I think need to be met.' 

On what the reaction of the bond markets might be to Mr Burnham becoming PM, he said: 'I think they can be content and I think this can be done in the right way.'

Meanwhile, Tory leader Kemi Badenoch accused Mr Miliband of betraying Sir Keir as he had his brother, David Miliband, who he challenged in the Labour leadership contest of 2010. 

At Prime Minister's Questions on Wednesday, Mrs Badenoch said: 'He was a failed Labour leader, rejected by the electorate, brought back from the wilderness by [Sir Keir], and when the going got tough he jumped into bed with the mayor of Manchester.

'Does the Prime Minister think that his treachery should be rewarded by being appointed Chancellor?' It was noted that Sir Keir failed to offer a defence for his Energy Secretary.