In a surprise move, Mr Raynsford may remain in his post at the Department of the Environment, Transport and the Regions while he campaigns for the Labour nomination for mayor.
The Greenwich MP, who was promoted to Minister of State in the summer's reshuffle, is seen as one of the Government's most able ministers and his entry to the contest has been encouraged by Downing Street, The Independent has learnt.
Mr Blair is keen to see a "serious" list of candidates for the mayoralty and Mr Raynsford's candidacy would add weight to a list that already includes Glenda Jackson, a former transport minister, and the broadcaster Trevor Phillips. Tony Banks, a former sports minister, is also expected to declare his hand before the end of the year.
Although no decision has yet been taken to bar Mr Livingstone from the Labour shortlist, the former GLC leader's continuing popularity, witnessed last night on the conference fringe, has worried officials at the party's Millbank HQ.
Mr Raynsford impressed Mr Blair with his sure-footed stewardship of the Government's Greater London Authority Bill, which set up the mayoralty. The 54-year-old MP has been attacked by critics for a perceived lack of charisma, but his allies believe his reputation for competence and his background in tackling homelessness in London could give him the edge.
Mr Raynsford's intention to retain his ministerial role while fighting for the Labour nomination may trigger controversy, but it is understood that neither party rules nor the ministerial code prevent him from doing so.
Both Ms Jackson and Mr Livingstone have prepared a hectic schedule of book signings and fringe meetings this week in a determined attempt to promote their candidacies directly to party members.
Yesterday Ms Jackson launched her own manifesto for the mayoralty, pledging to eradicate homelessness in the capital within four years. Crucially, the Hampstead and Highgate MP also promised that she would push on with the Government's public-private partnership (PPP) to improve London Underground. All of her rivals - Tory and Labour - have condemned the scheme as unworkable.Reuse content