Close allies of Tony Blair have drawn up plans to create a new political party if Labour crashes to a historic defeat and have already received pledges of funding if it is needed, according to sources familiar with the discussions.

The former prime minister has said he wants to see the moderates reclaim control of Labour after the general election.

But some of his political allies have concluded that the party cannot be saved from the clutches of the hard left and that a “plan B” will be required.

Tim Shipman: What is Tony Blair up to?

A source who used to work for Blair told The Sunday Times: “People are waiting to see just how bad the damage is on June 9. They will look at the results and say, ‘Is this