Labour's selection of Henry McLeish as candidate in Glenrothes would be a fascinating choice, working on so many political levels that it sounds like a match made in heaven for Gordon Brown's spin doctors. Labour sources initially claimed yesterday that the idea was nonsense, but the signals became less clear as the day went on.

Many within his party have never forgiven him for becoming a "virtual Nat". It is certainly true that Mr McLeish has been brought into the Nationalist fold by Alex Salmond through appointments to commissions examining prison policy and broadcasting.

The former Labour First Minister has also co-written a book on the Scots diaspora with the prominent Nationalist and Justice Secretary Kenny MacAskill and written a thoughtful book advocating a much stronger version of Home Rule than most in his party.

But, in the way of politics, if Mr McLeish were selected and went on to lose the by-election, it would allow Labour to turn around such a result, blaming the incumbent, and of course it would also throw an awkward set of questions in the direction of the SNP Government, which has been so quick to accept his endorsement.

The former First Minister may be unpopular in some Labour circles as a result of becoming what some have dubbed a "crypto-Nat", but he retains great support in Glenrothes where most locals feel he was unfairly done down during the office expenses affair which forced him to resign as First Minister and ultimately withdraw from frontline politics.

There is a general purdah on discussing the candidate selection before John MacDougall's funeral on Monday, but in the real world of politics, which Mr MacDougall would have understood, it is impossible to avoid the issue.

It is a seat adjacant to that of Gordon Brown and which was lost to the SNP at the last Holyrood election, and it would have been an act of folly for Labour not to have considered future events in Glenrothes.

How bad are the prospects in the seat? It was held by more than 10,000 at the General Election in 2005 but this masked a terrible decline in Labour fortunes in the seat, which equates to the old Central Fife constituency and that of West Fife before that, giving it a radical connection dating back to the Republican Willie Hamilton and before that to the Communist Willie Gallagher.

The real worry for Labour is Tricia Marwick, the existing SNP MSP. She is a doughty opponent, a Fifer who sounds like and Old Labour campaigner, and whose relentless work on the ground turned the Holyrood seat round last year.

At the same time, proportional representation brought in a wave of SNP councillors, with one of them, Peter Grant, the council leader a certainty to contest the by-election.

So the SNP appear to have a certainty about candidate selection, a strong figure in the area keen to stand, and an organisation on the ground that has got stronger with every passing year.

That is why the bookmakers have made the SNP odds-on favourites to take this seat, even although on the strength of their recent boasts about national polling it fall just outwith their list of prizes.

Labour have a range of options from local councillors Willie Sullivan, Mark Hood or Kay Morrison, not to mention the group leader and Gordon Brown associate Alex Rowley. It is understood that Councillor Rowley is not in the frame, not least because he is so close to the Prime Minister that this would compound any defeat.

Others in the frame for Labour are two of the regional list Holyrood MSPs, Claire Baker and John Park. There are many backers supporting Mr Park, who has strong union credentials, but all these considerations will kick in only after the former First Minister's position is resolved.

It may well be that Henry McLeish, ditched all too readily by his party and seen as a pariah for daring to treat with the Nationalists, will be seen as his party's best hope of stemming the tide riding against Gordon Brown, or at least of being damage limitation if he fails.