The Labour Party began a formal process to choose its next leader on Tuesday, a day after Sir Keir Starmer announced his resignation as Prime Minister and party leader.

Starmer confirmed his departure on Monday following sustained pressure within the parliamentary party over the government's record and a series of damaging electoral setbacks. The Labour Party's National Executive Committee will meet to set the timetable and rules for the leadership election.

Greater Manchester mayor Andy Burnham, a former cabinet minister who has long signalled national ambitions, was widely regarded by Labour figures as the frontrunner. However, he does not currently hold a seat in the House of Commons. Cabinet ministers including Deputy Prime Minister and other senior front-bench figures were also expected to weigh bids for the leadership.

The transition raised immediate constitutional questions about who would serve as caretaker Prime Minister while the contest proceeded. Labour Party officials said the party intended to conclude the process quickly to limit instability, while the Conservative opposition demanded a general election rather than what its leadership called a backroom succession.

The pound and gilt markets were closely watched as investors assessed the political uncertainty, and Buckingham Palace was expected to be involved in any formal handover of government should a clear successor emerge.