Lord O'Donnell, former head of the civil service, who was also one of the frontrunners for the post, has decided not to apply, leaving Lord Turner, head of the Financial Services Authority, as the other serious contender for a post that has been described as the most powerful in the civil service because of its beefed-up responsibilities under a new regulatory regime.
O'Donnell said that after 33 years in the public sector he was looking at other priorities. "You need a governor who desperately wants the job and is willing to serve eight years," he told the Financial Times.
He denied he had been campaigning for the job and said he was taking up a position with Frontier Economics as an adviser, but would not be drawn on his favoured candidate. "I hope whoever is governor is supportive of monetary and fiscal co-ordination," O'Donnell told the FT. "Yes, you need an independent governor, but some things need the [Bank and Treasury] working together. Quantitative easing is a classic example where governor and chancellor need to work together."
The full list of applicants will be given to George Osborne after the 8.30am deadline on Monday, and a decision is expected by the end of the year. The new governor will take over in June 2013.
Whoever gets the £302,000 job will be given greater powers than King has had during his 10 years running the Bank. As part of a complete overhaul of financial regulation, the Bank of England will next year take on responsibility for monitoring the wider banking system and preventing financial or economic crises, as well as looking after monetary policy.
Philip Shaw, an economist at Investec, said: "The single biggest issue is that the job has just got so huge and that, in effect, has narrowed the field of suitable candidates. Paul Tucker, having served as deputy governor, is clearly one of the stand-out candidates."
Tucker has spent almost his entire career at the Bank of England. He has been deputy governor in charge of financial stability for more than three years. However, his long tenure could count against him. As executive director for markets in 2002-09, he was a key policymaker during the period that markets spun out of control.
He has also been tainted by the Libor scandal. Emails released during the investigation into rate-rigging suggested Tucker was far too close to the now disgraced former Barclays boss Bob Diamond. Although cleared of deliberate wrongdoing, Tucker was accused of naivety for failing to spot the market abuse.
Turner, who steps down as Financial Services Authority chairman next year when the regulator is split into two, has been the banks' most outspoken critic but some say he has too many enemies in the City to be a successful governor.
It is thought the Treasury could look abroad to fill the role, although it has been quick to deny reports that Mark Carney, governor of the Bank of Canada, has been sounded out. Claims this weekend that Glenn Stevens, governor of the Australian central bank, was asked to apply have been quashed in the Australian press.
Other outside contenders include Andy Haldane, executive director for financial stability at the bank, although most people believe that at 45 he is too young.
Kate Barker is one of the few women to be mentioned. As a member of the monetary policy committee over nine years, she helped set interest rates, but has criticised plans to hand the Bank extra powers to oversee the wider banking system.
For the first time, the Treasury advertised the job in the Economist. The advertisement called for a "strong communicator", with "good interpersonal skills" and "a person of undisputed integrity and standing".
Candidates were asked to send a resume, cover letter and a questionnaire disclosing prior political activity and potential conflicts of interest.
A panel of senior civil servants will consider applicants and make recommendations to the chancellor and prime minister.
In the frame
The deputy governor of the Bank of England has intimate knowledge of the central bank after more than two decades there, but could be tainted by the Libor rate-rigging scandal. Despite that, he remains the leading contender.
In 2009, the chairman of the Financial Services Authority described much of the City's activities as socially useless, which may have won him too many enemies to take on the role of governor.
A former Bank of England chief economist, Vickers was appointed by the government to lead the Independent Commission on Banking to promote stability in the banking industry. His appointment would suggest the government is committed to banking reform.
As a former member of the Bank's monetary policy committee, Barker has extensive experience of the central bank, but she has been outspoken about the new powers to be handed to the next governor.
guardian.co.uk © Guardian News and Media Limited 2010