Ed Miliband came under assault from Labour's union backers today, as fury over his decision to embrace austerity measures led to open discussions about the withdrawal of financial support for the party.
But the Labour leader responded defiantly, telling his critics he was determined to "do the right thing by the country" and if they did not like that, it was "tough".
He called on public sector workers to "prioritise jobs over pay" and accept wage restraint in order to avoid redundancies and cuts to services.
"Let's do it in a fair way, but let's preserve jobs and services," he said. "I think most people will think it is the right choice."
Unions affiliated to Labour have been fuming since shadow chancellor Ed Balls said on Saturday that he would not promise to reverse Government cuts or lift the 1% pay cap on public sector workers.
Unite leader Len McCluskey went public with his anger, using a newspaper article to warn that Mr Miliband was setting Labour on course for electoral "disaster" and undermining his own leadership.
And GMB general secretary Paul Kenny wrote to the union's senior officials saying that Mr Balls's speech could have a "profound impact" on its relationship with theLabour Party.
Conservatives would be "rubbing their hands in glee" at the "serious mistake" made by Labour's high command, said the message.
"I have spoken to Ed Miliband and Ed Balls to ensure they were aware of how wrong I think the policy they are now following is," wrote Mr Kenny.
"It is now time for careful consideration and thought before the wider discussions begin on the long-term implications this new stance by the party has on GMB affiliation."
Asked about the prospect that unions, which between them provide 90% of Labour's funding, might disaffiliate from the party, Mr Miliband said: "They have to make their own decision. I am not going to change my policy in the face of threats. I am going to do the right thing."
And he added: "Of course there are going to be some people in the party don't like it but I'm afraid that's tough. We need to do the right thing, the responsible thing and that's what I'm going to do."
Mr Miliband said that Labour continued to believe that the Government was going "too far and too fast" in imposing cuts on public services.
But he said that Chancellor George Osborne's Autumn Statement had made clear that the failure of coalition economic policies would mean Labour inheriting a deficit if it returns to power in 2015.
"Given the economic mess they are creating and the economic mess we will inherit if we win the next election, it would be irresponsible for us to promise now to reverse these cuts in three and a half years' time," said Mr Miliband.
"We have got to convince people of two things at the next general election: that we are on their side and will do more for them than our opponents; but also that we can do so in a fiscally credible way.
"That has always been a challenge for the Labour Party. It's a challenge I am determined we will confront and surmount."
Asked if he ever thought the party might do better if he stood down as leader, Mr Miliband responded: "That doesn't arise."
In his article in The Guardian, Mr McCluskey warned: "Ed Balls' sudden weekend embrace of austerity and the Government's public sector pay squeeze represents a victory for discredited Blairism at the expense of the party's core supporters.
"It also challenges the whole course Ed Miliband has set for the Party, and perhaps his leadership itself."
Mark Serwotka, general secretary of the PCS public sector union, which is not affiliated to Labour, said: "My worry is that if people want austerity and buy into this notion that we have to pay the price, they will stick with the people who are doing that quite nicely at the moment.
"What Ed Miliband has to do is say there is an alternative to this, and I think at the moment his position is confused."
There were signs of unease among Labour MPs at the leadership's new direction.
Left-winger John McDonnell said Mr McCluskey's article "sums up the general feeling amongst Labour Party supporters of overwhelming disappointment".
Mr McDonnell said: "The economic crisis is a game-changer and for Labour leaders to react to it with the same old failed policies that mean ordinary people will pay for the crisis is such a crushing disappointment."
Bassetlaw MP John Mann said Mr Miliband was sending out "the wrong message" and urged him to "go back with his Shadow Cabinet and think through where he is going with this".
PA
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