The party's second-in-command has indicated that Andy Burnham could have won the Gorton and Denton byelection, while she urged her party to make more use of the influential Greater Manchester mayor.
Overturning a substantial 13,000-vote Labour majority from the previous general election, a local Green councillor, a community tradesperson, became the party's fifth MP on Friday. This happened in an area that had consistently returned Labour MPs for nearly a century.
Reform UK's Matt Goodwin finished second, just ahead of the Labour candidate, Angeliki Stogia.
The unexpected outcome has sparked fresh debate of the party's controversial decision to prevent Andy Burnham from contesting the seat last month.
Speaking to the BBC, Labour's deputy leader, Lucy Powell, remarked, "He probably would have held the seat. I think certainly the Greens wouldn't have gone after the seat in the same way that they did."
Powell was the sole member of Labour's ruling national executive committee to support allowing Burnham to stand, with the majority, including leader Keir Starmer, voting against.
However, she told the BBC she understood "collective responsibility" for the ruling, pointing to worries over necessitating a separate election in Greater Manchester.
Powell also stressed that her party needed to learn from the reasons for Burnham's widespread popularity in the region. She said people "view him as someone who is on their side, someone who is delivering those Labour values and party pledges."
"We have to draw on that, make use of Andy Burnham, but also learn from it and reflect on how we could replicate that success nationally," she added.
Andy Burnham is reportedly considering having another go at becoming an MP again. One ally commented, "Given the current political climate, who knows what might happen. It would be unwise to say he would never."
To date, Burnham himself has not publicly spoken on the Gorton and Denton outcome. Meanwhile, Keir Starmer has pledged to continue despite labelling the poll result "disheartening."
Angela Rayner, a prominent voice on Labour's left, described the byelection result "a wake-up call" for the party.
In contrast, the Home Secretary is expected to caution about the party moving to the left in response to the defeat. This comes as she introduces new laws on stricter border controls next week.
A source close to the Home Secretary was reported stating, "The party should not misinterpret the message from its electoral setback. The idea that we are alienating support over immigration is just plain wrong."
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