Updated: 3:58 p.m.

With the Senate set to return next week from its August recess, one of the remaining outstanding issues facing the chamber is what the death of Sen. Edward Kennedy (D-Mass.) will mean for the leadership of the Banking, Housing and Urban Affairs panel and Health, Education, Labor and Pensions Committee, two of the chamber’s top panels.

Sen. Chris Dodd (D-Conn.) is currently the chairman of the Banking Committee. But when Kennedy — who led the HELP Committee — fell ill with brain cancer last year, he tapped Dodd and Sen. Tom Harkin (D-Iowa) to lead the charge on health care reform in his absence.

As the next in seniority on HELP, Dodd is widely expected to formally assume the chairmanship from Kennedy, his longtime friend. That would mean that Sen. Tim Johnson (D-S.D.), who continues to recover from a brain aneurysm he suffered in 2006, would likely take control of the Banking Committee. With several bank and credit card companies operating out of his home state of South Dakota, the Banking chairmanship would be a plum spot for Johnson, who is considered to be more business-friendly than Dodd.

But one source familiar with Dodd’s deliberations said that it is still too soon to say whether he will choose to switch committees. According to this source, Dodd is undecided, and he is discussing the situation with his closest advisers and colleagues.

This source speculated that Dodd may wait until Tuesday when the Senate reconvenes to make any announcement.

A Johnson aide declined to comment pending an announcement from Dodd.

Dodd, who faces the race of his career when he’s up for re-election in 2010, has remained mum on his plans, and Senate Democratic aides said he has not informed leadership of his next move. Nevertheless, Senate Majority Leader Harry Reid (D-Nev.) this week told the Reno Gazette-Journal that he expects Dodd to take over HELP.

“We’re going to have a new chairman of that committee. It’ll be, I don’t know for sure, but I think Senator Dodd. … He has a right to take it,— Reid told the Reno paper.

When news of Kennedy’s brain cancer first broke last year, speculation began as to whether the Massachusetts Democrat would cede his HELP gavel to Dodd. At the time, however, Dodd seemed content to remain on Banking, which was in the middle of the Senate’s efforts to address the economic collapse.

But with the health care reform bill now taking center stage — and passage of the bill widely seen as a legacy for Dodd’s late friend Kennedy — it now appears likely he will make the move, Democrats have said.