It is believed that both parties are focussing their efforts on gaining seats in targeted Tory constituencies rather than fighting each other.
A senior Labour source told the Times that the party’s “limited resources” means they will be looking to direct their campaign efforts in areas where they have the best chance of defeating the Tories.
The Lib Dems are prioritising the 90 seats where they came second to the Tories in 2019, of which many were previously safe Lib Dem seats before the coalition saw them flip.
Both parties denied they had agreed to any formal pact.
Labour leader Sir Keir Starmer reportedly told his party to “ruthlessly focus” their energy on these target seats before the next general election, thought to be in 2024.
A Labour source told the publication: “We will run everywhere and fight everywhere but we don’t have unlimited resources so it makes sense to concentrate on those where we have the most chance of winning a seat.
“If you look at where our target seats are, in England they are almost all Tory seats.”
Eighty-six of the top 100 target Labour seats are currently held by Boris Johnson’s party, 13 are held by the SNP and one by Plaid Cymru.
A Lib Dem source said: “We came second to the Tories in 90 seats [in 2019] and although we will never say exactly how many seats we will target, these are obviously the areas in which we are looking.”
The Conservatives currently hold 26 out of the top 30 Lib Dem target seats, and Labour hold only one.
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Another distinct possibility is a hung parliament, with no party holding an overall majority.
Both Labour and the Lib Dems have appeared to dismiss suggestions that they would form a coalition if this were the case, with Sir Keir Starmer as Prime Minister and the Lib Dems giving him the extra seats he would need for a majority.