The BBC's John Kampfner: "Labour Headquarters have a two pronged strategy to try to prevent Livingstone winning the vote"

Mr Phillips had been hoping to win the Labour nomination for the post. He will instead be the running mate of the party leadership's favoured candidate, Frank Dobson, who was a surprise late entrant to the race.

In a statement Mr Phillips said: "I am today withdrawing my candidacy for the Labour nomination for mayor of London and backing the only serious candidate left in the race, Frank Dobson."

Frank Dobson will make Trevor Phillips his deputy and head of the new police authority

The two have struck a deal which would - if former health secretary Mr Dobson were to become mayor at the election next May - see Mr Phillips nominated as his deputy and head of the new London police authority committee.

Mr Phillips' decision leaves a three-way battle to win Labour's nomination between Mr Dobson, Brent East MP Ken Livingstone and former transport minister and actress Glenda Jackson.

Along with the news of his withdrawal from the race came the announcement from Labour headquarters that Mr Phillips had been placed top of the party's "top-up" list of candidates for the new Greater London Assembly, to be elected at the same time as the mayor.

'We agree on everything'

Mr Phillips denied he had entered the mayoral race simply to raise his profile and secure a berth as deputy mayor.

"I have been talking it over with Frank ever since he decided to run, and we agree on virtually everything," he insisted.

"This partnership is not about what is best for me, but what is best for London."

He sought to brush aside any apparent contradiction with his own dismissal in a BBC News Online interview earlier this year of a deputyship offer - from Ken Livingstone on that occasion - as racist.

Ken Livingstone: "I am not leaving the Labour Party"

"He {Livingstone] told a lot of people I was going to be his deputy before he told me. The difference between Ken and Frank is that Frank talked it over at great lengths with me first."

Opinion polls had for some time shown Mr Phillips, a Blairite loyalist, languishing some way behind other prospective mayoral candidates.

When Mr Dobson entered the race Mr Phillips' prospects of picking up the anti-Livingstone vote were further diminished.

Ken Livingstone gives his reaction

So too were those of other loyalist candidates. Planning Minister Nick Raynsford bowed out of the battle last week to become Mr Dobson's campaign manager.

Ms Jackson is now expected to come under increased pressure to also stand down in order to maximise Mr Dobson's chances.

Electoral college, not Omov

Last week Labour managers caused surprise when they backtracked on plans to hold a one-member, one-vote ballot of London party members to choose the candidate. Instead, an electoral college will make the decision.

The electoral college gives a third of votes to MPs, MEPs and GLA candidates, a third to the unions and a final third to party The system is likely to favour Mr Dobson over Mr Livingstone, a left-winger popular with Labour's rank and file.

Neil Kinnock is one of those who has warned against voting for Ken Livingstone to become London mayor

Mr Livingstone on Wednesday warned that strong attacks on him in recent days by senior party loyalists, including former Labour leader Neil Kinnock, Education Secretary David Blunkett and other ministers, could prove counter-productive.

The attacks were becoming "more hysterical", the MP said, because it could end up a very close finish for the nomination between himself and Mr Dobson.

"I can't believe the scale of abuse," Mr Livingstone told BBC Radio 4's Today programme.

"If I win the Labour nomination, these are the people who are going to have to go out and urge people to vote Labour. This will all be thrown back at them."

He also dismissed speculation that he would run for mayor as an independent candidate, declaring: "I am staying in the Labour Party ... I am not standing as an independent."