Andy Burnham is expected to replace Rachel Reeves as chancellor and offer her a more junior cabinet position if he becomes prime minister, the BBC understands.
A spokesperson for Burnham said no decisions had been made about who he would appoint.
The MP for Makerfield is the only candidate to have emerged so far for the Labour leadership, and has met Prime Minister Sir Keir Starmer for talks as he prepares for a likely entry to No 10.
Senior Cabinet minister Darren Jones ruled himself out of the running for the leadership on Wednesday, and if there are no other candidates, Burnham could become prime minister by 17 July.
The biggest decision Burnham will make as he begins to sketch out a possible cabinet is who will be his chancellor, and most Labour MPs assume Reeves will not continue in that role.
As first reported by the Financial Times, external, she is expected to be offered a more junior cabinet position.
A close ally of Burnham told the BBC: “Andy really respects Rachel and I’m confident he’ll want her in his top team.”
The Treasury has been approached for comment.
It is unclear who might replace Reeves as chancellor, with Ed Miliband, Wes Streeting, John Healey and Yvette Cooper among the names mooted.
James Purnell, who served as a minister in Gordon Brown’s government between 2007 and 2009, is expected to become Burnham’s Downing Street chief of staff.
