The consultation process - which will take more than a year - will dash Liberal Democrat hopes of a referendum on PR before the election.
It will also provoke heated debate between pro-PR reformers in the Government, such as Mo Mowlam, and those, including Margaret Beckett, who are against changing the present system.
The move will delight trade unions such as the electricians' union, the AEEU, which will use the year-long process to seek support for ditching Labour proposals for electoral reform.
Unions are to be asked to consult their members on whether Labour should adopt "AV-plus" - the PR system recommended by the recent Jenkins Commission.
Pro-PR campaigners in the party believe that, even if a referendum is delayed until after the next election, the consultation process will help to inform members about the benefits of change.
"Many people associate PR with the Liberal Democrats but it also is very relevant to the Labour Party," said one Labour source. "This consultation will give Labour voters in no-hope Tory constituencies the chance to make their votes count for the first time."
The Prime Minister wants to gauge opinion on voting reform within the party before fixing a referendum date. The Cabinet is divided on whether to abandon first-past-the-post, but Labour has a manifesto commitment to a national referendum on PR.
This month the party HQ will send MPs, unions and key party activists the consultation document setting out the arguments for and against AV- plus, a system that keeps MPs linked to constituencies but gives parties that gain a big share of the vote in regional areas an extra "top-up" of MPs. The conclusions will ultimately be put to a vote at next year's party conference.
The original consultation document was axed after members of the National Policy Forum - which shapes Labour policy - decided it was too anti-PR.Reuse content