Margaret Beckett, Labour's deputy leader, said it was important to find an 'agreed settlement' to the clash over one member, one vote (Omov), while Bill Morris, general secretary of the Transport and General Workers' Union - the party's biggest affiliate - said there would have to be 'movement' between the two sides.
Speaking at the T&G's biennial conference, Mr Morris said his simple advice to the Labour leadership was: 'Talk to us.'
The comments by Mrs Beckett and Mr Morris constitute the first sign that both unions and the party leadership might be prepared to give ground. The two sides, however, dug themselves into tough negotiating positions yesterday.
Mr Morris told the 700 union delegates at Bournemouth that there would be 'no divorce or separation' between the two sides of the movement and that unions must continue to play a collective role in electing the Labour leadership and in the selection of parliamentary candidates.
He proposed a 'code of conduct' for union input into party democracy which will fall far sort of the aspirations of Labour leaders. Mr Morris said the minimum requirement for the deployment of the union block vote should be that union levy payers have the opportunity to express their views at branch meetings. It was 'consultation' processes like those, rather than ballots, which helped to elect Mr Smith and also sparked a fresh row over Labour democracy.
Mr Smith is insisting that trade unionists who pay the political levy should pay a modest extra amount to become party members before voting.
In an interview in yesterday's
Financial Times, the Labour leader, who addresses the T&G conference tomorrow, said he would not surrender his position: 'I will fight on. My argument is right. I will maintain it.'
Mr Smith is on course for an embarrassing defeat at the Labour conference on the issue because unions, which command 70 per cent of the vote at the policy-making conference, oppose Omov.
However, Mr Smith indicated he might be prepared to negotiate over suggestions by some unions that members who pay the political levy and register as Labour supporters should vote in the electoral college for the Labour leadership.
Yesterday at Bournemouth, Mrs Beckett also expressed interest in a suggestion by the T&G leader that a decision over the method of selecting parliamentary candidates should be postponed. Mr Morris argued there was no urgency over the selection process because the Boundary Commission was not due to report until next year. Further endorsement for the delay came from John Edmonds, leader of the GMB general union, Labour's second biggest backer.
The Amalgamated Engineering and Electrical Union - the only big party affiliate to back Mr Smith's plan for Omov - is today expected to announce that its members have reaffirmed support for its political fund. All the money in the pounds 1m account is donated to Labour.