Deputy Prime Minister John Prescott is to hold talks with Ken Livingstone in an effort to dissuade him from standing against official candidate Frank Dobson in the mayoral contest.

And the future of the London Underground is likely to be high on the agenda.

Mr Prescott's move is significant as it highlights the Labour leadership's unease over the threat from the left-winger.

He will try to persuade Mr Livingstone to back former health secretary Mr Dobson.

Since being narrowly beaten by Mr Dobson for the Labour nomination, Mr Livingstone has remained silent over whether he will stand as an independent.

He had dropped heavy hints in the past that he would and his supporters have urged him to. If he did, it would split the Labour vote in London and weaken the party's chances of winning.

So Mr Prescott, together with Labour's general secretary, Margaret McDonagh, has agreed to meet the Brent East MP next week.

Mr Livingstone says the Tube's future is a key issue in the wrangle over the mayoral contest.

But Mr Prescott has stressed that he will be meeting Mr Livingstone in his capacity as deputy leader of the Labour Party, rather than as Secretary of State for the Environment, Transport and the Regions, or Deputy Prime Minister.

Crossrail bonds idea

The government is committed to injecting private cash into the Underground, but Mr Livingstone is opposed to this.

A report in the Sunday Telegraph suggested that Mr Prescott might be ready to suggest a trade-off, offering to adopt the MP's idea of issuing public bonds to finance Tube redevelopment for the separate Crossrail project, a long-proposed £2.5bn commuter link running through central London.

Mr Prescott has insisted he would not be offering Mr Livingstone any deal on the future of transport in London.

He said: "I am no more in a position at this meeting to change agreed manifesto commitments than Mr Livingstone is.

"This is particularly the case as regards the London Underground and our plans for a public-private partnership. These plans will go ahead under existing conditions.

"As for matters relating to Crossrail, these will be decisions for the future mayor of London to reach - clearly in consultation with central government.

"As deputy leader of the Labour Party, I agreed to meet Mr Livingstone with Margaret McDonagh if it could be of any help at all to discuss the implications of his indecision over his position.

"I will be pressing him to accept that Frank Dobson is Labour's candidate for mayor and that he should back Mr Dobson."

Former Labour Prime Minister Lord Callaghan joined those urging Mr Livingstone not to break from the party and run as an independent.

He told BBC 1's Breakfast With Frost Programme: "I think he will be unhappy in many ways if he does [run]."

"Ken must remember of all the people who voted for him among the Members of Parliament - those who know him best - he was very badly beaten."

'No bribes'

Mr Livingstone described as "tainted" the electoral college procedure which saw him defeated, despite gaining more support among unions and party members than Mr Dobson.

A senior Labour source said the party wanted to be "conciliatory" towards the MP.

And the source pointed out that Mr Prescott was not opposed in principle to the use of bond issues to raise finance for major construction projects.

They were being used in the Channel Tunnel rail link, for example, and might be suitable for a new project such as Crossrail.

But the source said there would be no attempt to bribe Mr Livingstone.