The Financial Times reports that the prime minister is set to appoint former Scottish secretary Helen Liddell as British high commissioner to Australia, replacing former Conservative chief whip Alastair Goodlad.

If confirmed, it will be the first appointment of a Labour politician to a senior diplomatic post since Tony Blair came to power in 1997.

Such a move would also increase speculation over who would be the next UK European commissioner. Both Liddell and former Northern Ireland secretary Peter Mandelson have been tipped as front runners for the post.