Prescott 'kept party in dark' over job losses

Angry Labour officials accused the Deputy Prime Minister, John Prescott, of "pulling the wool over their eyes" after news slipped out just ahead of Christmas of redundancies among party staff.

Mr Prescott told members of the Labour national executive in September that there would be job losses unless they agreed a 50 per cent increase in party subscription fees. After the Deputy Prime Minister's intervention, the executive reluctantly agreed the rise from £24 to £36 a year, but the party high command is now pressing ahead with 35 redundancies in the new year.

It is understood that the executive has not been consulted about the cuts and could mount a fierce resistance.

News of the new year job losses was circulated to divisional managers and regional directors in an internal memo seen by The Independent. Another document reveals that retired Labour Party workers will receive a below-inflation increase in benefits.

Labour's hierarchy is also accused of not adopting agreed procedures over the redundancies. Sources at the GMB union, which represents most of the party's full-time workforce, insist some senior employees' representatives were "kept out of the loop". The new left-leaning executive may feel the issue is an opportunity to challenge the leadership.

A Labour Party spokesperson said union officials had been consulted at every stage.