The Daily Telegraph (Feb 26, p10) reported that senior party figures have made it clear to Mr Dobson that John Prescott has already determined policy on the Tube and that it will not be changed to suit the prospective mayor.
The Times (Feb 26, p1) reported that Ken Livingstone was holding Labour to ransom, making it clear that he was ready to stand as an independent unless the government capitulated on a flagship transport policy.
The paper said that it is thought Mr Livingstone may announce his candidacy when he appears on BBC1's Question Time on Thursday.
Bidders for the controversial£12bn privatisation of the underground rail network have been told by London Underground that it has decided to investigate the financing of the Tube by issuing bonds.
London Underground's about-face is revealed in confidential guidance notes sent to bidders two weeks ago - well before official Labour candidate Frank Dobson announced last week he wanted to convene a panel to consider the options for Tube funding.
The examination of the attractiveness of bond finance will come as London Underground and the government compile their assessment of whether it would be cheaper or more efficient to keep the Tube in public ownership.
This test - dubbed the 'public-sector comparator' - is designed to satisfy public spending watchdogs that taxpayers' money has not been wasted by choosing to privatise the Tube.
As well as putting together a report on the comparative cost of the proposed upgrade under conventional government finance and ownership, London Underground will examine the relative costs of bond finance and whether, as is claimed by its supporters, the technique would be a route to a cheap revamp.
Labour has offered a secret deal on transport privatisation to Ken Livinstone amid a growing belief that the MP is getting cold feet about standing for London mayor as an independent, reported The Sunday Telegraph (p1).
Deputy prime minister John Prescott will formally offer to adopt Mr Livingstone's idea of issuing public bonds to finance the planned£2.5bn Crossrail line, a long-awaited commuter link to run through the centre of London.
Mr Prescott, who is to meet Mr Livingstone today, will refuse, however, to abandon the government's commitment to the partial privatisation of the Tube.
The compromise, which was floated to Mr Livingstone's advisers last Wednesday, is designed to give the MP a face-saving formula to withdraw his threat to stand as an independent.