Andy Burnham is the likely successor to Sir Keir Starmer as Prime Minister, with reports suggesting he plans to replace Rachel Reeves as Chancellor of the Exchequer with a more junior cabinet position if he secures the Labour leadership.

The former Greater Manchester mayor is currently the sole declared candidate for the Labour leadership race, which was triggered by Starmer's resignation following Burnham's victory in the Makerfield by-election. This move allows Burnham to re-enter Parliament and position himself for the top job.

While no official decisions have been made regarding cabinet appointments, sources close to Burnham indicate that he respects Reeves and intends to keep her within his top team, albeit in a less senior role. James Purnell, a former minister under Gordon Brown, is expected to be appointed as Burnham's Downing Street chief of staff.

A significant early challenge for a potential Burnham premiership would be defense spending. Discussions are reportedly underway with John Healey, the former defence secretary, who recently resigned citing insufficient planned increases in military funding.

Sir Keir Starmer met with Burnham on Tuesday to discuss an "orderly transition of power," marking their first meeting since Burnham's return to Parliament. Burnham could become Prime Minister as early as July 17 if no other candidates emerge to challenge him.

However, some Labour MPs are exploring the possibility of a leadership contest to avoid an uncontested ascension for Burnham. Cabinet minister Darren Jones and former armed forces minister Al Carns were considered potential contenders. Jones has since confirmed he will not run, stating that Burnham is set to be the next Prime Minister and would win a contest.

Al Carns remains undecided, telling BBC Newsnight he is awaiting clarity on Burnham's policy agenda before committing to a leadership bid. For any candidate to make the ballot, they require nominations from 81 Labour MPs and either 32 local party branches or three affiliated organisations, including two trade unions.

The economic policies and fiscal approach of a potential Burnham government are also under scrutiny, with discussions focused on how much to spend on key areas such as defense, amidst ongoing economic challenges facing the nation.