Blair was hatching a plan to appoint Miliband before heading off on holiday next month, should Prescott resign during the next few weeks, The Sunday Telegraph said without naming its sources.

The paper added that Blair's aides were keen to avoid a "nightmare scenario" of Prescott assuming responsibility for running the country -- while facing allegations of extra-marital affairs and of links with a US gambling tycoon bidding to set up a London casino.

Meanwhile, The Sunday Times reported that Miliband, 40, would become deputy prime minister following the Labour Party's annual conference in September.

In the meantime, and in the event of Prescott's resignation, Prescott could be replaced temporarily by Foreign Secretary Margaret Beckett or Leader of the Commons Jack Straw, the newspaper added.