Ed Miliband would be a "disaster" as chancellor, the boss of Iceland has warned. Speculation is high that Sir Keir Starmer's likely successor Andy Burnham will pick the Energy Secretary for the role. But Lord Walker, a Labour peer who is also the Government's cost of living tsar, predicted that the markets would "freak out". He told BBC Newsnight: “He’d be a disaster.”

The Labour peer added: “Climate change is real. I believe in science. But I think how we’re going about it is far too ideological. I think it’s putting unfair pressure on households and on bill payers in a very regressive way. “I think if Ed were to come in, it would be baulked at by the business communities, the markets would freak out.”

Mr Burnham is reportedly yet to settle on his choice of chancellor, though speculation has focused on Mr Miliband.

But some within Labour have cautioned against appointing the former party leader, who is leading the net zero drive.

The Prime Minister's right-hand man Darren Jones issued a thinly-veiled warning earlier this week.

Mr Jones appeared to suggest that Mr Miliband would not meet his “tests” to run the Treasury.

He said any new chancellor should not seek to “control” the prime minister, and would have to reassure markets, unions, MPs and the public – declining to say whether he thought Mr Miliband met those criteria.

Other names mooted for the Treasury include ex-health secretary Wes Streeting, Home Secretary Shabana Mahmood and Foreign Secretary Yvette Cooper.

It comes as Mr Burnham, who won the crunch Makerfield by-election earlier this month, looks set to enter 10 Downing Street within weeks.