Following Labour's rejection of job offers from Ken Livingstone, the London mayor has agreed to set up an independent panel of experts to examine the contentious issue of Tube funding.

Labour had refused to take up Mr Livingstone's offer of senior posts - including deputy mayor - unless he U-turned on his threatened confrontation with the government over its planned Tube sell-off.

BBC News Online has learned that Mr Livingstone has approached Simon Jenkins, the former editor of The Times and The London Evening Standard newspapers, to chair the panel. Mr Jenkins is understood to have accepted.

Speaking to BBC News Online, Mr Jenkins would only confirm the approach: "I had put forward the concept of an independent panel to see if there was any common ground between the government's and [Mr Livingstone's] position on the Public-Private Partnership for the Tube."

He added: "We have discussed it today."

A statement later issued by the Greater London Assembly confirmed that Mr Livingstone would establish an independent panel of experts.

"The mayor has decided to set up an independent panel of experts to scrutinise the various proposals for financing the modernisation of the London Underground, including bonds, government grants and the Public Private Partnership," it said.

"Following the publication of the panel's report, the mayor will in consultation with the assembly determine how to proceed."

It is thought Mr Jenkins will decide the panel's membership.

Pre-agreement manoeuvring

Labour's rejection of the job offers earlier on Tuesday was seen as part of the manoeuvring towards a final agreement by members of the party's GLA group to participate in Mr Livingstone's mayoral administration.

Mr Livingstone offered the post of deputy mayor to Labour member Nicky Gavron and said he was "absolutely confident" that she would accept.

In a statement the Labour group said they were "interested" in Mr Livingstone's offer but wanted full details.

Labour's insistence that it would only consider jobs if Mr Livingstone dropped his plans was tantamount to a refusal to play any role in a Livingstone administration.

Opposition to government plans to part-privatise the London Underground formed a key part of Mr Livingstone's mayoral campaign. Since his victory at last week's election he had reiterated his determination to challenge the sell-off.

But despite the initial rejection of senior posts Mr Livingstone's cabinet, the party is thought likely to end up agreeing to participate in his administration.

'Willing to co-operate'

Nicky Gavron was offered the number two slot

The Labour group statement said: "Labour remains a distinctive group with a clear manifesto. The Labour team is willing to co-operate with the mayor where this is evidently in the interests of London and Londoners.

"The Labour group will promote our distinctive policies in any roles which we may fill.

"Nicky Gavron has discussed the one-year offer of deputy mayor with colleagues on the Labour group.

"The group is interested in the offer ... however it requires full details of the powers of the position and the relationship it has to the mayor's powers.

"As part of any agreement to fill the deputy mayor position, we expect the mayor to agree to step back from threatened confrontation on the issue of the Underground PPP.

"We propose that the matter be considered by a panel of independent experts to be guided by the five principles outlined in Labour's mayoral manifesto."

Tories complain of 'tokenism'

The statement was issued after talks between Mr Livingstone and the Labour group.

Meanwhile, Liberal Democrat Lord Tope has already turned down an offer to become chairman of the fire and emergency planning authority.

The Conservatives have also complained of "tokenism" after being offered a minor job by Mr Livingstone despite being the joint largest party in the Assembly.

Mr Livingstone said after his victory he hoped to form a broad administration and "heal the wounds" caused by the bitter election campaign.

Green GLA member Darren Johnson has already accepted the environment portfolio from Mr Livingstone.