Shabana Mahmood expected to beat Ed Miliband in race to become Burnham's chancellor

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Rachel Reeves is predicted to be replaced when Mr Burnham becomes Prime Minister later this month, despite his team refusing to comment.

Speculation had grown in recent weeks over the position with Energy Secretary Mr Miliband emerging as a frontrunner but Labour whips have since informed colleagues that they expect Ms Mahmood to be appointed to the role.

Mr Miliband has instead been tipped with a switch to the Foreign Office, with one Labour ally describing him as a potential "lightning rod for criticism".

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Another said: "The tide has turned against Ed" third added: "It looks like the right outcome has been reached".

Mr Burnham will finally be sworn in as PM on July 20 following the resignation of Sir Keir Starmer.

One Miliband ally told the Financial Times: "He’s close to Burnham and stuck his neck on the line.

"He supplied some of his support team and is well aligned with the key figures so we’re all expecting him to be chancellor for myriad reasons."

They added: "I’ve heard the Foreign Office a couple of times too. [That[ would be a promotion of sorts. But it would be seen as a snub."

Mr Burnham's team have refused to comment on speculation and the Makerfield MP will only reveal his cabinet after July 20.

Ms Reeves delivered a speech at Mansion House on Tuesday in what is believed could be her ast public address as Chancellor.

Reflecting on her two years in the Treasury, she urged Britain to be "much bolder" and go "much further" in its relationship with Europe.

She said: "This government has shown that change, indeed radical change, is possible, and the record of the last two years makes clear that governments can achieve that change only when they combine radicalism with credibility.

"I had to earn that credibility in opposition, and I have proven it in government in every action that I have taken as Chancellor."

Earlier on Tuesday, the incoming PM addressed the House of Commons for the first since since been sworn into Parliament where he said a “serious review” was needed into MPs’ security after the killing of Ann Widdecombe.

Asked why he thought frontline politics had become so dangerous, the Makerfield MP told reporters in Parliament: "I notice quite a lot of change in the building behind me 10 years away, no more so than on the question of security.

"Actually, I was quite shocked to see how much security now has to be in place, and even so, it may need to be increased further. Politics has darkened in the last decade, there’s no getting away from that.

"It’s obviously appalling what happened to Ann. I knew Ann over many years in the House, and you know, we would get along – and everybody would get along."