This morning the Guardian is reporting that Jim Murphy, one of David Miliband’s two campaign managers, attended a meeting with members of the Ed Milband camp to map out how they would handle Saturday’s leadership result in the event of Red Ed winning. The Telegraph says “The overture is being seen as a signal that the elder Mr Miliband, long regarded as the front-runner in the race to succeed Gordon Brown, is bracing himself for defeat.”

Bookmakers overnight saw a big move onto Ed Miliband, some suspect that any deep pocketed operation to manipulate betting markets on behalf of David Miliband to keep his odds low has come to an end now that voting has closed. The odds are now more accurately reflecting the closeness seen by the pollsters. Mike Smithson over at PoliticalBetting.com is calling it for Ed and predicts that the brothers will soon be at evens or Ed will go favourite before the result is known on Saturday…

The campaigning is over, the counting has begun. For political punters like Guido there is a fascinating divergence between the punters and the pollsters, YouGov is calling it narrowly for Red Ed, the punters reckon it will be David Miliband. Why?

Guido has heard various theories:

• YouGov got the weighting wrong for the union affiliates – being peddled by some Mili-D supporters.
• YouGov / LeftFootForward have analysed the distribution of second preferences incorrectly – something Guido has questioned.
• Someone is deliberately manipulating the betting markets on behalf of Mili-D to influence the MP/MEPs’ votes – they want to back a winner for careerist reasons – they can be influenced by the publicly available odds.

We’ll find out in two days…

Paddy Power and William Hill are no longer taking bets fearing something might leak. The latest prices from Political Smarkets* are:

In the humiliation stakes punters still reckon that despite Guido’s never-ending support, Ed Balls is still the favourite to to be eliminated in the first round. Guido thinks he might not come last and is a seller at 41%.

*These are implied probabilities, when they add up to over 100% it is called the “over-round”, the bigger the over-round the less efficient the market is, for an explanation see here.

In a move completely out-of-place for someone who can put their head on the pillow confident in the knowledge that they hadn’t relied on information from tortured terror suspects, David Miliband decided yesterday he would return to the FCO to “look over some papers”. But of course he isn’t worried about anything.

The last thing the ailing front-runner would have wanted is to have his murky involvement in this matter splashed across the Guardian, again, but it seems they have decided not to make an enemy of him forever by holding off with their attack until its almost too late for any real impact to the leadership vote. As ever Guido will take a balanced approach and encourage fair play about it dredging up a political figures past. Just as Labour suggest that Andy Coulson should be held responsible for what happened on his watch with their now well-worn line, is David Miliband lying or incompetent?

If as many expect Mili-D wins the MPs’ vote, splits the members vote with his brother, but Mili-E still wins overall because the union vote goes overwhelmingly to him, Guido gets the impression that the few remaining Tory strategists sitting in CCHQ won’t believe their luck. Kevin Maguire can see the danger, Mili-E will he says be “portrayed as the union’s man, lacking a mandate from the Parliamentary Labour Party”.  He will be “Red Ed” – the union baron’s preferred puppet…

Is the Labour Party actually going to reject Mili-D, the only candidate who is attempting to reach out to the centre and hasn’t given into the left, for his younger brother? “They’re skipping Hague and going straight to IDS, in tune with what the party members want, out of tune with what the voters want” says one CCHQ source. Polls show that Labour Party members themselves know Mili-D is more likely to beat Cameron, they still don’t care, emotionally they want a leader who tells them what they want to hear. Soon we will find out if Labour’s heart has ruled over its head…

Labour Uncut claims that “This Saturday, David Miliband will be elected. It will not mean that we are on the path back to power. Nor that we have fully come to terms with our election defeat. But we will have a new leader.” Well at least half of that is true, but that hasn’t stopped David’s campaign team putting a bit of stick about amongst the 2010 intake of MPs to secure their support in the non-secret ballot.

Guido hears that the David’s henchman have told the newbies “We are going to be back in power in 2015, so this decision is about whether you want a ministerial job or not.”

The campaign is clearly brimming with confidence…

Guido commented yesterday on the nervousness in the David Miliband camp, but it seems things could be worse than previously thought. After so many years it is impossible to take anything Peter Mandelson says at face value so when his head pops up above the parapet it is not without reason. He has kept a relatively low profile in the campaign so far, only pushing his book rather than David Miliband. However with just a matter of hours left to vote, he dips an oar in to slam Ed.

Given most ballots have already been cast, the impact of such a spurious and late intervention is negligible, but it certainly shows some eleventh hour desperation to give it a go…

After reading endless tips from Mike Smithson on PoliticalBetting.com to back Ed Miliband, Guido switched his bets on Friday. David Miliband’s implied probability of victory had already dropped from 75% to 65% by the time Guido shifted his money from one brother to the other. He is at the time of writing given a 59% chance of winning the leadership (40% for Ed Miliband). Given it is too close to call that could narrow to 50% / 50% soon. Both camps are of course claiming their internal polling numbers point to victory.

In the humiliation stakes punters reckon that despite Guido’s never-ending support, Ed Balls is still the favourite to to be eliminated in the first round. His odds on avoiding humiliation have improved, dropping from a 62% certainty down to a still not good 41%, with Diane Abbott on 35% and Burnham given 30% a chance of going out first. If you are reading this Sally Bercow, and still think Balls is going to win the leadership, a £5 bet will win you £1000.

If Chris Bryant was somewhat over-detailed in his resume – including every boy scout badge was hardly necessary, Tom Harris is going to the other extreme, or, as he puts it “cutting to the chase”. He looks manly, as he says, he can hold his own at the dispatch box. He includes pictures in his email  to prove it:

Via Labour Uncut.

YouGov’s data is now out from the Sunday Times Labour leadership poll which forecasts Ed Miliband winning. The Labour party’s use of AV shows how perverse that electoral system can be.

• 44% think David Miliband “would be most effective, as leader of the opposition, at holding the present government to account”, versus 21% for his brother Ed.
• 55% think David “Is most likely to lead Labour to victory at the next General Election”, only 25% think Ed would do so.
• 45% think David “Would make the best Prime Minister” versus 28% for Ed.

Yet YouGov calculate Ed will just shade it on second preferences. Are they mad? Labour supporters think David Miliband is twice the leader his younger brother will be, yet they are going to choose the weaker candidate on second preferences. As Forrest Gump might say – “Stupid is as stupid does”…

Someone is going to get a shock based on these Sunday Times/YouGov polling results. With two weeks to go until the results are known and voting already taking place it is, all are agreed, going to be close. Punters are predicting a win for David Miliband whilst pollsters YouGov are predicting a narrow win for Ed Miliband.  Admittedly the punters could change their positions on this news, but as things stand currently they are ignoring the pollster overall.

Guido is sticking with his money on David Miliband to beat his brother Ed because he disagrees with the YouGov / LeftFootForward analysis of how the second preference votes will break. It will be close undoubtedly and there does seem to have been a shift in the union affiliates section of the electoral college and Guido has taken money off David to win that section (Ed is now 60% favourite to win the union members vote). David Miliband is still overall favourite to win the leadership, the MEP/MPs votes and the members votes. Guido can only think that the switch in union affiliates to Ed is a result of Union bosses’ endorsements sent out with ballot papers.

UPDATE : Ed Balls remains favourite to be eliminated in the first round. Oh dear…