A weekend of negotiations is expected to finalise a deal allowing Ken Livingstone to become Labour's mayoral candidate.

Senior figures are said to be putting the finishing touches to deal allowing the man who stood as an independent candidate to return to the Labour fold.

Officials on the party's national executive are set for a secret meeting next Wednesday at which they are expected to vote to end Livingstone's expulsion.

He is expected to be made a formal offer at a full NEC meeting in December.

To pave the way for his selection Labour's current mayoral candidate is expected to announce that she is standing aside.

Despite rumours that Nicky Gavron was quitting the race last week, she was last night said to be holding out for further concessions.

Gavron was persuaded to stand aside during a meeting with the prime minister on Tuesday.

But she later told the Labour Party chairman Ian McCartney that it would come at a price.

Gavron wants guaranteed powers as Livingstone's deputy and the opportunity to play a key role in next year's campaign.

The move will pave the way for "Red Ken" to become Labour's official candidate for next year's mayoral poll.

The former Brent East MP was banned from the party for five years in 2000 after running against Frank Dobson.

Livingstone has made clear he has "no problem" with making Gavron his deputy as part of any deal. The Labour assembly member served as his number two for the first two years of his mayoralty.

Gavron revealed earlier in the week that she was ready to consider her position "in the interests of the party and of London".

With polls placing her in fourth place, party officials moved early to placate London's Labour MPs - who fear a bad result could damage the party's general election prospects.

Despite a bitter war of words over the tube, relations between senior Labour figures and the mayor have thawed in recent months.

Livingstone this week joined Tony Blair during a visit to a school in South London and was with him in East London last week at the launch of a new training centre.

Home secretary David Blunkett said Livingstone was "very different from the man I dealt with 30 years ago".

The mayor also signalled that he was willing to let bygones be bygones when he took to the hustings to campaign for Labour in the Brent East by-election.

Earlier this week Blair gave a strong hint that Livingstone's exile from the Labour Party could be brought to an early end.

Speaking in the Commons the prime minister pointedly refused to name Gavron when challenged over who he would support for the mayoral race.

"I, of course, always support the Labour candidate," Blair told MPs on Wednesday.

But some Labour MPs, including several Cabinet ministers, are opposed to Livingstone's return to the party.

Education secretary Charles Clarke is said to be leading a Cabinet revolt over plans to readmit the mayor.

Gordon Brown is also said to be against Livingstone's return, but will accept any decision made by the National Executive Committee.

And some members of the NEC are said to be angry at the behind the scenes manoeuvring.

The Tories seized on the news that Livingstone is set to return as a "desperate" move by Labour.

Shadow local government minister David Curry said: "Labour are haemorrhaging votes across the capital and are desperately attempting to fool the electorate into voting for Livingstone again next year."