The party's second-in-command has indicated that Andy Burnham could have won the recent Manchester byelection, while she urged her party to make more use of the popular Greater Manchester mayor.
Overturning a sizable 13,000-vote Labour majority from the previous general election, Hannah Spencer, a local plumber, was elected as the party's fifth MP on Friday. This happened in an area that had elected Labour MPs for nearly a century.
The Reform Party's Matt Goodwin placed second, narrowly beating the Labour candidate, Angeliki Stogia.
The unexpected outcome has sparked fresh debate of the party's choice to prevent Andy Burnham from standing in the seat last month.
In an interview with the BBC, Labour's deputy leader, Lucy Powell, stated, "Andy Burnham probably would have held the seat. I think certainly the Greens wouldn't have gone after the seat in the manner that they did."
Powell was the only member of Labour's top decision-making body to support allowing Burnham to stand, with the majority, including leader Keir Starmer, voting against.
However, she told the BBC she accepted "collective responsibility" for the ruling, citing concern about necessitating a mayoral byelection in Greater Manchester.
Powell also emphasized that her party must draw inspiration from the sources of Burnham's widespread popularity in the region. She said people "see in him someone who is on their side, someone who is delivering those Labour values and party pledges."
"We have to utilise that insight, make use of Andy Burnham, but also draw on that and consider how we could do that better across the country," she added.
Andy Burnham is understood not to have ruled out having another go at becoming an MP again. One ally commented, "Given the current political climate, who knows what might happen. It would be unwise to say he would never."
So far, Burnham himself has yet to comment on the byelection result. Meanwhile, Keir Starmer has pledged to continue despite calling the poll result "disappointing."
Angela Rayner, a key figure on Labour's left, called the byelection result "a wake-up call" for the party.
Meanwhile, the Home Secretary is expected to caution about the party moving to the left in response to the defeat. This comes as the government proposes legislation for stricter border controls next week.
An insider was quoted as saying, "The Labour government should not learn the wrong lessons from its electoral setback. The idea that we are losing Muslim voters over immigration is simply incorrect."