Labour leadership: John McDonnell vows to stay out of contest in blow to Rebecca Long-Bailey

Shadow chancellor to have 'no involvement', despite expectations he would back shadow business secretary

John McDonnell has said he will stay out of the Labour leadership contest, dealing a blow to Rebecca Long Bailey's hopes of succeeding Jeremy Corbyn.

The shadow chancellor, who remains a highly influential figure in the party, has decided to have "no involvement" in the contest, which will begin formally next month.

He had been expected to endorse Ms Long Bailey, the current shadow business secretary and a protégé of his, who is likely to run on a platform of continuing Mr Corbyn's agenda.

While she has yet to formally announce a bid, Ms Long Bailey is understood to have the backing of several close Corbyn allies and is tipped to secure the endorsement of the influential Unite union.

She is also reported to have agreed a pact with shadow education secretary Angela Rayner, who was also tipped to run for leader but is now expected to stand for deputy instead. The pair share a flat in London and are good friends.

Mr McDonnell has previously talked of Ms Long Bailey as a future leader and had been expected to endorse her when the contest begins.

However, a source close to the shadow chancellor said: "John has made a conscious decision to have no involvement in the leadership election and will focus solely on his role as shadow chancellor, including Labour's intervention in the Queen's Speech debate and the Budget."

His decision to apparently withdraw his support came as it emerged that the shadow business secretary had appointed a controversial far-left organiser to lead her campaign.

Alex Halligan, who worked on Jeremy Corbyn's successful 2015 leadership campaign and is now employed by Ms Long Bailey, was pictured in 2017 wearing a badge reading "Goodnight Trotskyite" and depicting a man being killed with an ice-pick - a reference to the assassination of Leon Trotsky, which was ordered by Josef Stalin.

A spokesperson for Ms Long Bailey declined to comment, but sources close to her said nobody had been appointed to run her campaign.

Sources close to Mr McDonnell would not be drawn on whether his decision not to endorse Ms Long Bailey was linked to Mr Halligan's involvement in her campaign.

The loss of the shadow chancellor's support will come as a blow to Ms Long Bailey, although she is still thought to have the backing of other key Corbyn allies, including Len McCluskey, the general secretary of Unite.

She is facing stiff competition in the race to succeed Mr Corbyn from fellow shadow cabinet ministers Emily Thornberry and Sir Keir Starmer, Treasury minister Clive Lewis and Wigan MP Lisa Nandy. Former ministers Yvette Cooper and David Lammy and Birmingham Yardley MP Jess Phillips are also thought to be considering a bid.

While the other prospective candidates have been taking to the airwaves to give their views on Labour's crushing election defeat, Ms Long Bailey has not made any public comment or even tweeted since the election almost ten days ago.