In future, trade unions will be invited to sponsor constituencies, not the sitting MPs, and money could be directed towards marginal seats. Mr Prescott said he was not expecting to hit "squalls" with the unions although there could be a row over some trade union sponsored seats, if they lose the cash to marginal constituencies.
The details of the new formula have yet to be agreed, but Labour leadership sources said it could mean big changes, as money was redirected away from safe seats to the marginals which Labour must take to win the next general election.
Tony Blair, the Labour leader who is sponsored by the TGWU, has thrown his weight behind the move. A leadership source said: "We want to make sure that the cash is delivered in the most effective way to the constituencies that really need it and we have to take account of the Nolan report."
Most unions support the move, but some left-wing traditionalists, including Dennis Skinner, the MP for Bolsover who is sponsored by the NUM, will fight tooth and nail if there is any attempt to end the link between the NUM and safe Labour seats like his own.
Mr Prescott said the unions would switch sponsorship from MPs to their constituencies to make it clear the money did not go into Labour MPs' pockets.
The change, which will be discussed by the national executive the sponsored MPs and the trade unions, will maintain the traditional links between unions and the party. Mr Prescott said he resented the implication in the Nolan report that the sponsorship of Labour MPs could be compared to the private consultancy fees paid to Tory MPs.
"Labour MPs don't pocket the money. I came in as a shipping MP committed to changing shipping legislation. It is a vested interest. It is open. But I came in from Hull. It benefits my constituents. What is going to happen is that there will be change so that trade unions can make donations to the constituency parties if they wish to do so. It is not sponsorship of MPs. I don't really envisage any squalls," Mr Prescott said.
In another move, Mr Prescott expects the rule change to reduce the block vote of the unions from 70 per cent to 50 per cent, equal with the constituencies, to go through without much difficulty at the party conference in October.
The trade union leaders are going along with the changes to the party. Mr Prescott welcomed the conciliatory remarks last week by Bill Morris, the general secretary of the TGWU, as "very important". Mr Morris accepted that Mr Blair could refuse to adopt a fixed figure on the minimum wage before the general election. Mr Prescott said Mr Blair would underline his support at the TUC this year for the European social chapter, ensuring workers' rights.Reuse content