Andy Burnham was last night facing demands to rule out appointing Ed Miliband as Chancellor.

Senior figures from the world of business joined forces with even Burnham-backing Labour MPs to warn that the Energy Secretary would wreak havoc if he was put in charge of the economy.

They predicted he would hike taxes further, as he sought to do as Labour leader more than a decade ago, and further push his Net Zero agenda that has been blamed for destroying jobs and pushing up energy bills.

There are also fears 'Red Ed' would seek to borrow billions more in a fresh lurch to the Left, spooking the financial markets. 

Hotelier Sir Rocco Forte warned: 'The idea of Ed Miliband becoming Chancellor has sent a shudder through the business community.

'He represents exactly the sort of anti-growth, high-tax, anti-enterprise thinking that has held Britain back for far too long.'

Mr Burnham is expected to set out his plans for growth and a promise to keep Rachel Reeves' fiscal rules next week, in a speech he hopes will reassure the markets after he caused alarm last year by saying Britain should not be 'in hock' to bond traders.

But he has not yet indicated who he wants to install in No 11 Downing Street to replace Ms Reeves, and is believed to be considering candidates from opposite wings of his party – Mr Miliband on the Left and Wes Streeting on the Right – in what has been seen as an indication that he is yet to settle on an economic policy.

Former Pizza Express entrepreneur Hugh Osmond told the Daily Mail: 'The two fundamental major costs of almost every product you can buy are labour and energy. Reeves has f***** one and Miliband the other.'

Senior figures remember that in his 2011 Labour conference speech, Mr Miliband branded some businesses 'predators'.

Drinks entrepreneur Steve Perez, founder of Global Brands, said: 'His manifesto was comprehensively rejected by the electorate and Andy Burnham would be mad to appoint him.' 

Sir Martin Sorrell, chief executive of S4 Capital, added: 'It would be a further lurch to the Left and an expensive embrace of Net Zero.'

And Neil Wilson, UK investor strategist at Saxo Bank, said: 'Gilt markets will be happy if it's Streeting, perturbed if it's Miliband, who's clearly the least market-friendly candidate for Chancellor.'

It comes amid continuing uncertainty over Mr Burnham's plans if, as appears likely, he succeeds Keir Starmer as Labour leader and Prime Minister next month.

The two men met yesterday for the first time since the former Greater Manchester mayor won the Makerfield by-election, which led to Sir Keir announcing his resignation on Monday.

Even an MP who backs Mr Burnham said they were against the idea of putting Mr Miliband, who was an adviser to Gordon Brown when he was Chancellor, in the Treasury. 

The source said: 'If Andy puts Miliband in as Chancellor he risks getting off on the wrong foot with business and the unions and we cannot afford that. I am heavily against it and I'm making my views known.'

Another source close to Mr Burnham said: 'My concern is the markets and media will make mincemeat of it, and we'll be on the back foot straight away.

'But his [Miliband's] team are really adamant that Ed's the only person that could withstand Treasury orthodoxy and get around it in ways others wouldn't.' 

A former Labour minister said: 'I would not have Ed Miliband running a whelk stall, let alone the Treasury. We are in a financial and economic hole and we need a Chancellor with at least some understanding of business.

'We also need someone who can explain what we're doing in terms that relate to people's lives. After two years of Rachel's robotic statements, the last thing we need is a tone-deaf member of the north London dinner circuit.'

But Labour's former deputy leader Baroness Harman said her fellow former Brownite was a strong candidate. 

She told Sky News: 'We should not be ruling out Ed Miliband. He's a great talent – he's very intelligent, he's economically literate and very committed and experienced.'

In an unlikely alliance, even Labour's Left-wing paymasters agree with the City that Mr Miliband is the wrong choice.

Sharon Graham, general secretary of the Unite union, said: 'It's been floated that Ed Miliband would be Chancellor. That would be a noose around the neck of what we need to do on jobs.' 

Gary Smith, the head of the GMB, branded Mr Miliband's opposition to more North Sea drilling as 'economic madness' that is costing thousands of jobs.

Mr Miliband has not commented on a possible Cabinet promotion.

It emerged last night that Mr Burnham's economic advisers believe he should scrap the triple lock on pensions.

The new Makerfield MP has said he will stick to Labour's manifesto – including a pledge not to scrap the triple lock – he has not committed to its long-term future.

His advisers are said to believe it is a 'no-brainer' to abandon the pension pledge, The Times reported.