City MP Liam Byrne’s high-profile bid to become mayor of Birmingham has been dealt a major blow – after it emerged Labour might ban him from standing.

Mr Byrne (Lab Hodge Hill), a member of Labour leader Ed Miliband’s Shadow Cabinet, threw his hat into the ring last month by announcing that he hoped to become Birmingham’s first directly-elected mayor.

It meant that he was competing against fellow MP Gisela Stuart (Lab Edgbaston) and former MP Sion Simon for the right to become Labour’s candidate, if the city votes “yes” to creating a mayor in a referendum on May 3.

But it has emerged that Labour is considering banning MPs from standing, because the party is terrified of losing another by-election.

If either Mr Byrne or Ms Stuart became the party’s candidate, they would have to resign from the House of Commons and a by-election would be held in their constituency, probably taking place at the same time as the mayoral vote on November 15.

Labour is reeling from the loss of Bradford West to George Galloway, of the left-wing Respect party, in a by-election last month.

Respect leader Salma Yaqoob is a former Birmingham councillor who visited Bradford to support Mr Galloway’s campaign and could be a formidable campaigner in Hodge Hill.

Labour Deputy Leader Harriet Harman is now said to be concerned that Labour could struggle to hold Hodge Hill if Mr Byrne stood down.

Birmingham Edgabston, which Labour held with a majority of just 1,274 in 2010, could also be difficult for Labour to hold on to in a by-election.

According to reports, senior Labour figures feel that the Bradford result showed how unpredictable by-elections can be and believe MPs should be barred from standing as mayor.

A party spokesman said suggestions sitting MPs could be barred from standing were “speculation” but did not deny the party was considering a ban.

He said: “It is highly speculative. We have made clear that we are going to learn the lessons from Bradford West.”