Andy Burnham opened his first Cabinet meeting as Prime Minister yesterday with a solemn appeal for loyalty.

'We will only make hope feel real if we are pulling together in the same direction with a sense of one team,' he told his new batch of ministers, many of whom had been heavily involved in the coup against his predecessor.

On the face of it, Labour is more united than ever. A staggering 379 of the party's 403 MPs nominated Mr Burnham for the leadership, giving him the luxury of a 'coronation' which has allowed him to enter No 10 by stealth without setting out his plans for the country.

But below the surface, the seething tensions and rivalries are already beginning to bubble up.

Former communities secretary Steve Reed – one of 11 Starmer allies axed in Mr Burnham's 'Night of the Long Eyelashes' Cabinet cull – hinted at potential trouble ahead after being informed his services were no longer required.

In a pointed letter to Mr Burnham, he said those who stood by Sir Keir had 'acted with integrity', adding: 'I hope those who did not show loyalty to Keir will now show it to you. I'm proud that I acted with integrity at every step over the turbulent past few months.'

Darren Jones, who acted as Sir Keir's 'chief secretary', also put his head above the parapet to undermine Mr Burnham's first policy announcement.

The new PM has sought to reassure financial markets he is not about to embark on the kind of reckless spending associated with past Labour leaders. Every policy, he said, would be 'fully funded'.

Andy Burnham opened his first Cabinet meeting as Prime Minister yesterday with a solemn appeal for loyalty

Yesterday that test fell at the first hurdle when he announced plans to suspend VAT on electricity bills – effectively a downpayment on his pledge to give people some 'breathing space' on the cost of living.

Downing Street said the £850million cost would be funded by the savings from scrapping Keir Starmer's digital ID cards scheme, estimated at £1.8billion over the next three years. The decision was announced at 6am in a bid to dominate the morning news broadcasts – and show the new PM was delivering on the cost of living crisis.

Less than two hours later, Mr Jones took to social media to torpedo the new PM's shiny new plan.

Cutting VAT on electricity bills was 'good news' and a 'simple way for families to save a few quid', he said.

But, he added: 'The Digital ID programme was unfunded. The Government will have to set out how it will pay for its new policies at the budget.'

Mr Jones, who was in charge of the now defunct scheme, was right. The Office for Budget Responsibility calculated the £1.8 billion price tag, but Sir Keir's government never accepted the figure.

However, pointing that out was seen as grossly disloyal. 'It's just sour grapes from a guy who's been sacked,' said one Burnham ally. 'I don't remember Darren saying ID cards were unfunded when he was running it.

'It will be funded from savings in the same way that was planned for ID cards – trying to suggest otherwise is just a deliberate attempt to damage Andy.'

But Sir Keir's former allies feel provoked by Mr Burnham's words and actions. The former PM did not really represent a grouping in the Labour Party – that was one of the things that made it possible for his critics to pick him off.

But Mr Burnham is in danger of creating a new faction of MPs and former ministers sickened by the way Sir Keir was removed.

The new PM's relentless emphasis on the North in general, and Manchester in particular, has also raised concerns.

Mr Burnham's reshuffle ended with 13 Cabinet ministers in the North and just four in London and the South-East.

Some Labour MPs are already discussing who might emerge as the party's 'King of the South' to champion their interests. Mr Jones, Mr Reed and the London mayor Sir Sadiq Khan are all seen as potential candidates.

John Healey, previously defence secretary under Starmer, is now the Chancellor of the Exchequer

Mr Burnham's actions in the past week have hardened attitudes among those who might otherwise have been resigned to their fate.

Accepting the Labour leadership on Friday, he claimed he had 'supported all our Labour leaders in my lifetime'. In an interview later, he insisted he was not involved in the coup against Sir Keir, adding: 'Obviously it was a decision taken by the Parliamentary Labour Party. I wasn't in Parliament – I wasn't in a position to be involved'.

One Starmer loyalist described the claim as a 'flat out lie', adding: 'He is just gaslighting us.'

The mood darkened further on Monday when the new PM carried out a brutal cull of ministers who had refused to join the coup against Sir Keir.

On Friday, Mr Burnham said that factionalism had 'bedevilled' the Labour Party and pledged to 'move beyond it'.

But the new PM chose instead to conduct a purge, sacking 11 ministers who had stayed loyal to Sir Keir, including Rachel Reeves and David Lammy.

Among the winners from the shake-up were Ed Miliband, Shabana Mahmood, Yvette Cooper and Sir Keir's chief whip Jonathan Reynolds, who had all told him his time was up.

John Healey, whose resignation all-but ended Sir Keir's survival prospects, was handed the key role of Chancellor.

One ally of Sir Keir predicted the one-sided reshuffle would eventually sow the seeds of Mr Burnham's destruction.

'You don't promote loyalists when you're strong – you appoint competent people who turn into loyalists. It is student politics,' the source said.

'He has just promoted people who did deals to kill the last PM. It sends the worst possible message to Labour MPs, because you are basically telling them that the way to get ahead is to take out prime ministers when the going gets tough. It is promotion for treachery.'

Last night, it emerged that the new PM is preparing to appoint Scottish Labour leader Anas Sarwar as a minister. In March, Mr Sarwar became the first senior Labour figure to call for Sir Keir to quit. He now looks set to be rewarded with a peerage.

Harriet Harman yesterday warned Sir Keir's allies to stop sniping. 'I need to speak to my colleagues who have been sacked from the Cabinet and just say, nobody wants to hear bitterness and resentment,' she said.

But, as the Conservatives found in office, regicide can be addictive. And Mr Burnham's brutal treatment of former loyalists has created a new 'awkward squad' of senior MPs ready to cause trouble as soon as he runs into difficulty.