By Elizabeth Piper, Andrew MacAskill and Muvija M
LONDON, May 14 (Reuters) - British Prime Minister Keir Starmer faced the increasing prospect of a leadership challenge on Thursday, with his health minister reported to be ready to resign and his former deputy calling on him to "reflect" on his position.
Starmer, who has repeatedly said he would fight to keep his job, has so far been unable to stem the tide of calls for him to set a timetable for his departure after his Labour Party suffered some of its worst losses in local elections last week.
While the number of calls for him to resign ebbed on Wednesday, when his government turned to King Charles to set out its agenda for a new parliamentary term, Thursday was set to become yet another showdown for Britain's prime minister.
Wes Streeting, the country's centrist health minister, was expected to resign later on Thursday to try to launch a leadership campaign, the Times newspaper reported, although Starmer's allies questioned whether he had the necessary number of backers required.
Starmer's former deputy, Angela Rayner, announced she had been cleared of deliberate wrongdoing over her tax affairs, an impediment to any leadership bid from her, but she would not say whether she wanted to launch a bid to oust the prime minister.
STARMER SHOULD REFLECT, RAYNER SAYS
"I've said to Keir this is a really significant moment for our party and the country ... The pace of change hasn't been enough for voters to see, and also mistakes have really blown us off course and made voters doubt us," she told the Guardian newspaper, adding he should "reflect on" stepping aside.
On her own leadership ambitions, Rayner, 46, said: "I’ll play my part in doing everything we possibly can to deliver the change, because it's not a personal ambition, I know the difference it makes."
She said in a separate statement that Britain's tax authorities had cleared her of tax avoidance, with no fine or penalty applied, a move she described as exonerating her "of the accusation that I deliberately sought to avoid tax".
Starmer, 63, had hoped to end the calls for him to resign, which began at the weekend when the scale of the losses in elections to councils in England and the parliaments in Scotland and Wales hit home.
REEVES WARNS OF CHAOS
He has adopted a "business as usual" approach and has received support from the majority of his cabinet team of top ministers. Sources close to him say he is determined to run if a leadership contest is triggered.
His finance minister, Rachel Reeves, warned lawmakers against "plunging the country into chaos" at a time when Britain's anaemic economy was turning a corner. The economy grew unexpectedly in March.
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She told the BBC that waiting lists for Britain's public health service were falling because of government investment.
"If we put that at risk, we put at risk the investment in our public services and also the growth that is necessary to help people with the cost of living," she said.
BOSS SAYS BUSINESSES BEING HIT BY TURMOIL
For now, a leadership race has yet to be triggered, but the political instability has pushed borrowing costs higher, with some investors nervous over the possible election of a more left-wing, tax-and-spend Labour prime minister.
The boss of Aviva, one of Britain's biggest financial companies, complained on Thursday that businesses were being hammered by the political turmoil.
"There have been too many changes of government strategy, leadership, just in my six years of being CEO, and I think that is harmful to a major economy such as the UK and how we are perceived abroad," CEO Amanda Blanc told Reuters.
If Starmer were replaced, the new leader would be Britain's seventh prime minister in around 10 years.
A poll by Survation published this week of Labour members found that a left-wing candidate would most likely win any leadership contest if the prime minister resigned.
Among the possible candidates on the left are Rayner, Greater Manchester mayor Andy Burnham and Ed Miliband, the minister for energy security and net zero. Burnham does not have the necessary seat in parliament to mount a challenge and would need a lawmaker to stand down to give him the chance to run.
For now both wings are canvassing support.
One Labour lawmaker, who has not called for the prime minister to resign, said he was approached by an ally of Streeting this week to ask for support.
"He is a nice guy, but we don't agree on the big issues," said the lawmaker, who is on the left of the party.
($1 = 0.7398 pounds)
(Additional reporting by Rhea Rose Abraham in Bengaluru; writing by Elizabeth Piper and Kate Holton in London; Editing by Jacqueline Wong, Paul Sandle and Alison Williams)
By Elizabeth Piper, Andrew MacAskill and Muvija M LONDON, May 14 (Reuters) - British Prime Minister Keir Starmer faced the increa...
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