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Benn could be replaced by Shadow Home Secretary Andy Burnham, Livingstone told the BBC's World at One programme on Monday.
Livingstone told presenter Martha Kearney that it would be better to move Benn to a position where he wouldn't be in conflict with Corbyn.
Here is what Livingstone said, the added emphasis is ours.
Livingstone: It would be better to move Hilary Benn to something where he is in agreement with Jeremy Corbyn, rather then where he's in disagreement.
Kearney : So, what do you make about this speculation about perhaps the sort of a jobs swap between Andy Burnham and Hilary Benn.
Livingstone: Well that's quite likely, all I know is what I've read in the papers.
Livingstone also disagreed with the Labour MPs who have come out recently to say that it would be a bad thing if Corbyn removes cabinet ministers for political reasons.
Livingstone: Well I think for the vast majority of the public, they're not terribly interested about who's in which position in the shadow cabinet.
While Livingstone seems quite happy to speculate on the reshuffle, Corbyn has been completely silent on the issue. The Labour leader has even been spotted shooing journalists away from his office door so they can't overhear his conversations with shadow ministers.