Tony Blair, the Labour leader, is sceptical about proportional representation, and senior party figures say a commitment to a referendum may not feature in the party's election manifesto. Mr Blair is said not to feel bound by the promise of his predecessor, John Smith, to put the issue to the people.
The shift puts pressure on Paddy Ashdown, leader of the Liberal Democrats, amid signs of tension over his decision to dump the notion of "equidistance" or neutrality between the main parties. By ruling out a deal with the Tories, Mr Ashdown upset some Liberal Democrats, including activists in the Littleborough and Saddleworth by-election.
Liz Lynne, Liberal Democrat MP for Rochdale, has made a career out of fighting Labour. The former MP Sir Cyril Smith said Mr Ashdown's abandonment of equidistance was "idiotic". Ms Lynne also criticised the policy.
Mr Ashdown attempted to redress the balance yesterday by attacking Labour as "unfit to be trusted with government". He told Sky News that his party would not be able to work with Labour "unless it changed".
If Labour failed to hold a referendum, it would greatly reduce the prospects of Mr Ashdown or any other Liberal Democrat leader ever holding power. Mr Blair made no secret of his scepticism about proportional representation when he was shadow home secretary and has not mentioned it since his election.
His hand is not free becausehe endorsed the referendum policy when campaigning for the leadership last year - while stressing his personal reservations. In 1993 Labour's party conference backed a referendum on electoral reform.
But, in drawing up his manifesto, Mr Blair cannot be bound by conference decisions. A Shadow Cabinet source said: "Technically, the policy still stands, but it is not being articulated by Tony or Gordon Brown so it goes into the background. The manifesto will be drawn up by a committee dominated by Tony's supporters."
Liberal Democrats are concerned that Labour's planned Welsh assembly will not be elected by proportional representation. There are also tensions over the system being planned by Labour for a Scottish parliament.
Electoral reform poses a threat to Labour MPs in the North, some of whose seats would be lost in any change.Reuse content