Sir Keir Starmer will announce as early as tomorrow that he is quitting as Prime Minister in the wake of Andy Burnham's decisive victory in the Makerfield by- election, it was claimed last night.

The PM was said to have reached the conclusion that his position was no longer tenable after talking to Cabinet colleagues, No 10 advisers, union leaders and key Labour donors.

Sources insisted Sir Keir, who is this weekend discussing his future with his wife Victoria at their country retreat Chequers, had yet to make a final decision. 

However, senior Labour figures told The Observer that they believed a clear statement could come from the PM as early as tomorrow or later this week.

Last night, Downing Street responded by insisting the position was unchanged from Friday when the PM vowed to fight on and said that he would not walk away from a challenge, which is now expected by Mr Burnham and also potentially from former Health Secretary Wes Streeting. 

Sir Keir said then: 'If there is a contest, yes I will run. I have said repeatedly I am not going to walk away from that.'

A Labour peer claimed the PM would not 'walk away' from Downing Street and create a political vacuum. Instead, he would 'arrange a slow march as a matter of duty and dignity'.

Andy Burnham, who trounced Reform UK at last week's by-election in the Greater Manchester seat, will be sworn in as an MP tomorrow.

Sir Keir is under pressure to make his intentions clear before Tuesday's Cabinet meeting. Another Labour grandee said: 'He's come up hard against the reality that the support isn't there.

'The truth is everyone knows this is no longer a tenable proposition. There's a sadness about it all but sometimes there's just an inevitability in politics.'

A Cabinet minister said Starmer was 'calmly going through things' after a series of conversations with his closest allies over recent days. 

'He just wants to do what's right for the country and, having spoken to the people he wants, he is now spending quality time with his most important adviser - Vic.' Another ally said Lady Starmer now carried more weight than any of his legion of close advisers and she was one of the only people he now listened to.

Up to recently, said the Starmer loyalist, she had been firmly of the view that the PM should stick it out and defy his critics. He said: 'Vic has been of the view that 'you need to keep on going'.'

Another insider made clear that her influence over her husband was paramount. 'Quite simply, she is his rock,' he said.

It was apparently Lady Starmer who stopped Sir Keir from throwing in the towel after Labour's calamitous results in May's local elections when some Cabinet colleagues told him the game was up.

But then as one No 10 source said: 'Vic is very important in talking stuff through with Keir.'

That's despite Downing Street previously insisting that Lady Starmer has no say in the machinery of government. And she has maintained a low profile in Downing Street - especially shortly after the 2024 general election, when she drew fierce criticism (as did her husband) over party donors paying for her outfits.

The couple have also strongly defended their family's privacy, particularly when it has involved their son and daughter who are now 18 and 15.

No 10 has previously insisted that Lady Starmer, who works as an occupational therapist in the NHS, was not involved with the Government's political affairs. But insiders are suggesting that this situation has understandably changed and she is now playing a highly political role.

According to one source, this is the inevitable outcome of Sir Keir's operation inside No 10 being 'hollowed out'.

Lady Starmer is often by the PM's side on the big state occasions. Last week, she flew to the G7 world leaders summit in Evian, France, alongside Sir Keir.

Last night a Tory source said: 'The only one Sir Keir has left in his corner is his wife. If she had any sense she'd put him out of his misery and tell him to pack it in.'