Gordon Brown is facing his first serious clash with Labour's rank and file amid claims that he is attempting to quash debate in the party.
Union leaders and party left-wingers have warned that they will be stripped of the right to put forward emergency motions to the party conference.
A string of so-called "contemporary resolutions" has caused headaches for the Labour leadership in recent years, provoking embarrassing conference clashes over issues from Iraq to foundation hospitals. This year activists are working to secure debate on a potentially controversial motion on council housing.
But activists have accused Mr Brown of trying to push potentially divisive debates off the main agenda by removing the right of local parties to table hostile conference motions and instead refer issues to the party's national policy forum. Under the plans, published within days of Mr Brown taking over from Tony Blair as Labour leader, unions and local parties will be able to submit a "contemporary issue", rather than a formal motion, for debate. Issues would be debated on the conference floor, and would be referred to the party's national policy forum. Final policy documents will be approved by a ballot of all party members.
But critics say the change, due to be debated at the party's conference next month, would abolish the traditional votes on contemporary issues that have been a lightning rod for discontent in Labour's rank and file. There are also concerns that the reforms will strip the Labour conference of its role as the party's supreme policy-making body.
John McDonnell, chairman of the Socialist Campaign Group of MPs, said: "I think they will have to pull back. People see this as the last vestige of democracy in the party. People realise if we go down on this one there is really little remaining for democracy." A member of the party's national policy forum added: "The thing that really concerns people is that conference will no longer be regarded as the sovereign body.''
The Campaign for Labour Party Democracy, an internal pressure group, said giving party members a final say on all policy documents without giving any opportunity for them to be amended "would undermine the sovereignty of conference, be expensive and divisive".
A party consultation document said the system of contemporary motion debates at conference was not working. It said: "There is a feeling across the party that on one hand, the process has been used to bypass the deliberative and consensual platform carefully agreed by the national policy forum over the years and on the other the process has also left many members feeling issues of interest or concern to them have not been listened to."
Further evidence of problems for Mr Brown emerged yesterday as he was accused of trying to "buy off" union critics with public sector pay deals that breach the 2 per cent pay ceiling announced by Mr Brown in March. A deal announced this week offers 2.45 per cent to council workers with rises of 3.4 per cent for the poorest paid. Earlier this month Alan Johnson, the Health Secretary, offered a flat £400-a-year rise to the lowest-paid NHS staff as part of a 2.08 per cent deal.
Chris Grayling, shadow Secretary of State for Work and Pensions, said: "This clearly smacks of an attempt by Gordon Brown to do something to buy off the unions to avoid trouble at the TUC and Labour Party conferences. The truth is that the unions are stronger today in the Labour Party than they have been for some time.''
A Treasury spokesman denied the Government had made a U-turn. He insisted settlements for local authorities and JobCentre staff were within pay limits.
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