By 2.30pm, with counting three-quarters complete, Mr Khan was on 40 per cent but Mr Bailey had fallen back one point to 35 per cent.
The first day’s counting ended last night with Mr Khan having received 487,104 first preference votes to 462,837 for Mr Bailey – a lead of 24,267.
Counting resumed today at 8am.
By 11am today, Mr Khan was ahead in five of the seven remaining constituencies and had an overall lead of 40 per cent to 36 per cent for Mr Bailey.
By 2.30pm, Mr Khan had retained his lead in the same five constituencies.
Mr Khan was ahead in Barnet & Camden – though only by one point after Mr Bailey narrowed his lead in the marginal north London constituency to 39 per cent v 38 per cent – and in City & East (49/27), Enfield & Haringey (46/30), Greenwich & Lewisham (47/26) and Merton & Wandsworth (44/33).
Mr Bailey was ahead in Croydon & Sutton (45/31) and South West (37/35). He had slowly gained ground throughout the morning but looked unlikely to gain sufficient votes to overtake Mr Khan.
It is hoped the winner can be declared this evening but this may be delayed until Sunday morning if progress is slow.
Candidates have been told the target is for an 8.30pm declaration of the new mayor – but a decision will be made at around 6pm today on whether to switch to a Sunday announcement if counting falls behind schedule.
It is highly likely that second preference votes will have to be counted. These come into play if no candidate secures more than 50 per cent of first-preference votes.
If this happens, the 18 candidates with the fewest votes are eliminated and the two leading candidates go through to a second round.
Any ballot papers marked with their name as the voter’s second preference are then added to their total.
Seven of the 14 constituencies on the London Assembly were declared yesterday. None changed hands – the Tories held three and Labour four.
But the results for the mayor from each constituency in general showed Mr Bailey doing better than expected and Mr Khan less well than in 2016, when he first became mayor by defeating Tory candidate Zac Goldsmith.
The remaining seven assembly constituencies will declare today on a rolling basis, from around 3pm.
The votes cast in each constituency for the mayoral candidates will also be revealed at the same time.
The seven constituencies declaring today are likely to be more favourable to Mr Khan, as five of these returned a Labour majority in the 2016 mayoral and London Assembly elections.
The constituencies declaring today are: City and East, Croydon and Sutton, Barnet and Camden, Greenwich and Lewisham, Merton and Wandsworth, Enfield and Haringey and South West.
The final 11 assembly seats, which are determined according to a complex proportional representation formula based on party support across London, are due to be announced from 9.30pm tonight.
The first results on Friday sent social media into meltdown as they suggested that Mr Bailey could be in with a chance of pulling off arguably the most dramatic mayoral result seen since the post was established in 2000.
Results from the first four constituencies put him 5,307 votes ahead of Mr Khan.
Mr Bailey achieved a lead of 56,280 votes in the Tory suburban strongholds of Bexley and Bromley, polling 100,630 to 44,350 for Mr Khan.
He also pulled off a surprise lead in Brent and Harrow, with 65,566 votes to 61,778 – a gap of 3,788.
And he was ahead in the West Central area, which covers key Tory areas such as Westminster and Kensington and Chelsea, including the Ladbroke Grove area where Mr Bailey grew up. Here he had a lead of 2,205, poling 53,713 to 51,508 for Mr Khan.
But Mr Khan scored a thumping majority of 56,966 first preference votes in the Labour stronghold of Lambeth and Southwark.
The votes for the mayoral candidates were published in the small print of each of the results for the seven London Assembly seats declared.
They showed that Mr Bailey exceeded expectations by some distance. In Bexley and Bromley he polled more than 100,000 votes – more than 3,000 more than Zac Goldsmith managed for the Tories in 2016.
In Brent and Harrow, the assembly seat was retained by Labour with a majority of more than 20,000 votes – but Mr Bailey outperformed his party’s assembly candidate by about 9,000 votes.
He also outperformed Mr Khan by 5,009 votes in Ealing and Hillingdon, with 79,863 votes to 74,854. This was in spite of the seat being held by Labour on the London Assembly.
Mr Bailey racked up a storming 82,361 votes in Havering and Redbridge, the constituency he and his family now call home, compared with 49,818 for Mr Khan – a net win of 32,543.
But Mr Khan performed strongly in the North East constituency, polling 67,126 more votes than his rival, 111,359 to 44,233.
In both of these east London constituencies, Mr Bailey beat the Tory vote achieved by Zac, now Lord, Goldsmith, in 2016 by several thousand votes – despite a fall in overall turnout.
The results also showed the Greens performing strongly, claiming second place in the Lambeth and Southwark assembly constituency and putting them on course for three or a record four assembly members.
The Lib-Dems said their results would improve today when seats such as South West declare.
The job of the 25-member assembly is to hold the mayor to account and scrutinise his or her policies.