The move to challenge the "Livingstone problem" head on comes as the former GLC leader holds a rally today calling for Tony Blair to allow his name to go forward in a one member, one vote ballot in the capital.
The comedian Jo Brand and the novelist Beryl Bainbridge will attend the meeting tonight at Westminster Central Hall that will mark the start of Mr Livingstone's campaign. In a populist move that echoed his leadership at County Hall more than a decade ago, he has placed adverts in the London Evening Standard calling on Londoners to back his right to stand.
If the campaign picks up momentum, it could prove too embarrassing for Mr Blair and Labour to scupper the MP's chances and could provoke more "control freak" headlines.
Ministerial sources have indicated there is a clear twin-track approach being devised that involves either blocking the MP through a vetting panel or taking him on with a "heavy hitter" in a straight fight.
The Blair camp's decision to keep open the option of Livingstone candidacy follows worries that plans to veto him could lead to unrest in the party.
Even backbench MPs who do not agree with the Brent East MP's views believe that he should be allowed to stand.
The strategy is fraught with danger for the party leadership as Mr Livingstone is believed to have significant grassroots support in London.However, party chiefs believe that the wider "armchair" membership in London, as opposed to the activists, will back a clear Blairite alternative.
The Secretary of State for Health, Frank Dobson, was seen as the best person capable of winning a mayoral primary, but he has said he has no intention of standing.
If no suitable candidate can be found within the next few months, the party is prepared to fall back on moves to block the former GLC leader through a vetting panel.