A FORMER Labour Party treasurer caught up in the ‘cash for peerages’ scandal has emerged as the hot favourite to succeed Harry Cohen as MP for Wanstead.

The party today refused to quash reports that Jack Dromey, husband of Labour deputy leader Harriet Harman, is a ‘very likely’ candidate for the Leyton and Wanstead seat, after he was identified by the Daily Telegraph quoting ‘a senior source’ in the party.

Mr Dromey, 60, who works as the deputy general secretary of the Unite union, hit the headlines when he said he was unaware of millions of pounds worth of loans made to the party in 2005, even though he was party treasurer at the time.

A high-profile police investigation was launched but no criminal charges were brought.

Luke Akehurst, an activist for Labour's London Regional Board, said that the move would certainly be opposed by local party members.

Writing on his political website, he said the area's constituency party was “fiercely independent-minded” and “won't take kindly to 'senior party sources' thinking they can drop one of their own number into the vacancy created by Harry Cohen's retirement.”

Mr Cohen announced his retirement from the seat which he has held for 26 years after facing fierce criticism for claiming a second homes allowance on a house in Colchester despite his constituency being just eight miles from Westminster.

Political opponents have been quick to seize on the claims, which the Labour Party has refused to deny.

The Conservative prospective parliamentary candidate for the seat, Ed Northover, said it would be ‘hypocritical’ of Labour to replace Mr Cohen with another controversial figure.

He added: "The Labour Party just don't get it. Harry Cohen is standing down amidst criticism of his enormous expense claims and the Labour hierarchy are considering parachuting in Jack Dromey of all people.

“Jack Dromey's likely selection is clearly a part of Ms Harman's leadership bid.”

Among others rumoured to be contenders for the Labour nomination are Waltham Forest councillor and cabinet member Marie Pye.

A spokesman for the national party said: "The local constituency Labour Party will in due course select a candidate to continue Harry Cohen and Labour's work for Leyton and Wanstead."