The hacking was discovered in the summer when Truss was foreign minister and campaigning to become party leader and the next prime minister, The Mail reports.

Economists and investors have said Sunak's appointment will calm markets, but they warn that he has few easy options when millions are battling a cost of living crunch.

At the top of the list are the UK's economic and social crises, with inflation exceeding 10%, the highest in any G7 country, owing to soaring energy tariffs and food prices.

Sunak, the 42-year-old former finance minister, becomes Britain's third prime minister in less than two months and the country's first leader of colour.

A return to the top would be an extraordinary comeback for Johnson, who remains popular with party members although a YouGov poll conducted on Friday found 52% of Britons would be unhappy to see him return as prime minister.

The winner will be announced on either Monday or Friday next week.

Liz Truss' departure comes amid Britain's intensifying cost-of-living crisis with inflation currently running at a 40-year high, fuelled by rampant food prices and soaring fuel bills.

She says she still believes in a 'high-growth, low-tax economy', but that economic stability is her priority as prime minister.

British Finance Minister Jeremy Hunt says the policy reversals will raise £32 billion for the government finances.

New finance minister Jeremy Hunt hit the ground running with a warning of looming tax hikes as he dramatically reversed course on Liz Truss' radical programme of economic reform.

With opinion poll ratings dire and many of her own lawmakers asking, not if, but how she should be removed, Liz Truss is relying on Jeremy Hunt to help salvage her premiership less than 40 days after taking office.

Liz Truss says action is needed 'now to reassure the markets of our fiscal discipline'.