Trade unions will no longer be allowed to enrol three million members a year to Labour ranks, Ed Miliband will announce on Tuesday in a dramatic effort to draw a line under the crisis gripping the party, following allegations of corrupt practice in candidate selection.
His move threatens a backlash from union chiefs – notably Len McCluskey, the leader of Unite, the country’s largest union – as it could pave the way to a reduction of their influence over Labour conference decisions.
Under his plans, which he will herald as the biggest party reforms in a generation, individual unionists will have to take a conscious decision to opt in to Labour membership rather than finding themselves signed up en masse.
Mr Miliband will also set out plans to hold more primaries to choose Labour candidates, beginning with its contender in the London Mayoral contest in 2016, and a new code of conduct for people bidding to represent the party.
His announcement has been rushed out as the party reels from allegations Unite attempted to “fix” the selection of a candidate in the constituency of Falkirk – a charge strongly denied by the union.
Police have been called in by the party to investigate the claims and on Monday the Conservatives asked the Metropolitan Police to probe accusations of wrongdoing in Labour selections in two London constituencies.
The 15 trade unions which are affiliated to Labour, also including Unison and the GMB, register around 3 million party members a year, providing an annual source of income of about £8.2m.
Under the Miliband plans, which Labour says it wants in place as soon as possible, each trade unionist would be asked each year whether they wanted to opt in to party membership.
Party sources acknowledged the move would initially deprive Labour of members and income, but insisted it would ultimately help strengthen its relationship with unionists.
Mr Miliband will say: “I do not want any individual to be paying money to the Labour party in affiliation fees unless they have deliberately chosen to do so.
“I believe we need people to be able to make a more active, individual choice on whether they affiliate to the Labour party.”
He will argue: “This idea has huge potential for our party and our politics. It could grow our membership from 200,000 to a far higher number, genuinely rooting us in the life of more people of our country.”
His plans will disappoint Blairites in the party who are privately pressing him to sever Labour’s historic links with the unions altogether and will be condemned as weak by the Tories.
They also threaten to run into strong opposition from union chiefs who will see them as a first step to watering down their large block vote in annual conferences.
Mr Miliband will say the 2016 London Mayoral candidate selection will take place through a primary contest open to all party members or registered supporters in the capital.
He will say the party wants to extend the idea of primaries to choosing candidates in parliamentary seats where an MP is retiring and there are not enough local members to achieve a “properly representative process”. He will also announce a new code of conduct for people seeking to be parliamentary candidates and strict spending limits for selection campaigns.
Mr Miliband has faced the worst crisis of his leadership over claims that Unite signed up hundreds of members to Labour in Falkirk without their knowledge to rig a selection.
The Conservative vice-chairman, Bob Neill, claimed Falkirk was the “tip of the iceberg” and wrote to the Metropolitan Police Commissioner, Sir Bernard Hogan-Howe, asking him to look into allegations of possible fraud in Ilford North and Lewisham Deptford.
Mr McCluskey has warned Mr Miliband to “step back from the brink of a ruinous division” and has accused him of “playing into the hands” of the Tories. He said he would not apologise for efforts to “reclaim Labour” and insisted Unite was innocent of any criminal wrongdoing.