Margaret Beckett, the deputy leader until the death of John Smith, and John Prescott will hold press conferences today to throw their hats into the ring. It will be decided after a ballot of constitutency members, trade union political levy payers and MPs, and announced on 21 July.
Mr Prescott, the Labour spokesman on employment, who declared himself fit for the battle after spending the night in hospital following a road accident, is certain to announce his intention to run for the deputy leadership in addition to the leadership, although there was no official confirmation of that last night.
Mr Blair, who will announce his decision to stand to his Sedgefield constituency tomorrow, was given the backing last night of Jack Cunningham, the Labour spokesman on foreign affairs.
Mr Cunningham was the second of the big Cabinet guns - after Gordon Brown, the Shadow Chancellor - to back Mr Blair. Announcing he was not contesting the leadership, Mr Cunningham said: 'Tony Blair has all the qualifications and ability necessary to be an outstanding leader.'
The backing of famous party figures such as Neil Kinnock, Roy Hattersley, and Lord Callaghan for Mr Blair is expected by party strategists to prove influential in the ballot among the new voters in the party rank and file.
Mr Prescott will be fighting on a platform of traditional Labour values with a radical cutting edge. His supporters resent the picture portrayed of Mr Prescott as 'Thumper' to Mr Blair's 'Bambi'. They promise a good- natured campaign, with the intention of securing policy commitments from Mr Prescott's agenda, including full employment.
Amid left-wing resentment that Mr Blair was being crowned by the media, Ken Livingstone, the Labour MP, last night issued a list of policy demands to 'pin down' Mr Blair. They included raising the top rate of taxation to 55 per cent on incomes over pounds 50,000. 'No politician has the right to ask the Labour Party or the British people for a blank cheque,' Mr Livingstone said.
By fighting for the leadership, Mrs Beckett is throwing open the prospect of losing the deputy leadership to Mr Prescott.
Senior Labour sources said a win for Mr Blair would damage the Liberal Democrats and they detect signs of irritation at that prospect by Paddy Ashdown, the Liberal Democrat leader.
Having scored an election coup with the timing of the defection of Alec Kellaway, the Liberal Democrat candidate in Newham North East, Labour leaders yesterday stamped on feelers being put out for a possible pact.
Laboursources made it clear the leadership would have nothing to do with a new group, called the Labour Initiative on Co-operation, seeking links with the Liberal Democrats. 'Our approach under a new leader will be identical to our policy under John Smith.'
John Major's advisers believe the Tory Party may gain if Labour under Mr Blair eats into Liberal Democrat support, which is threatening the Tories in its heartlands in the South.