LONDON, May 15 (Reuters) - Britain's governing Labour Party said on Friday it had agreed to let Greater Manchester Mayor Andy Burnham seek a return to parliament, a step towards a possible challenge to Prime Minister Keir Starmer's leadership.
The prospect of a challenge from the left-leaning Burnham has deepened a crisis for Starmer, whose party suffered heavy losses in local elections last week, and unnerved investors, as Britain's borrowing costs jumped on Friday by the most in over a year.
On Thursday a lawmaker gave up his seat so that Burnham could seek election to parliament, which is necessary if he is to challenge Starmer for Labour Party leadership and thus replace him as prime minister.
Burnham had sought the permission of Labour's National Executive Committee to stand in the by-election.
A party spokesperson said the NEC had "today given permission to Andy Burnham to stand in the candidate selection process in the forthcoming by-election for the Makerfield constituency".
Burnham has said he wants to "change Labour for the better" but has stopped short of explicitly saying he will challenge Starmer, though dozens of lawmakers who this week urged Starmer to set out a timetable for resignation favour Burnham as his successor.
Earlier this year, the NEC blocked Burnham from running for a different seat in Greater Manchester, a move decried by the left of the party as an attempt by Starmer and his allies to block a rival.
Friday's decision means Burnham will not be blocked again in a similar manner by Labour, although he has not yet been formally confirmed as its candidate. The by-election is likely to be a close contest with Nigel Farage's populist right-wing Reform UK.
(Reporting by Alistair Smout; Editing by Kevin Liffey)
