Mr Smith is prepared to agree to retain the existing electoral college for leadership contests in which trade unionists who pay the political levy could participate if they registered as Labour supporters.
As the explosive debate with the unions has worn on, the Labour leader has avoided explicitly ruling out such a deal, concentrating his efforts on insisting - as he still does - that from this autumn political levy paying trade unionists should pay an extra amount, 'levy-plus', to become full party members before voting in parliamentary selections.
His preparedness to accept a trade- off now coincides with reports that taking union block votes and constituency votes together, the reforms would be lost by as much as five to one when put to the autumn policy- making conference. Bill Morris, general secretary of the Transport and General Workers' Union, the party's biggest affiliate, described the shift of stance as 'very positive', promising to examine any proposals.
Mr Smith's speech to the 700 delegates at the TGWU conference in Bournemouth today will emphasise heavily that 'one member, one vote' remains the guiding principle for internal party elections.
But a draft form of words that could be put as an amendment to a conference resolution is already circulating, while a Labour source close to Mr Smith said: 'In order to find a way through he's not pushing the leadership as hard as before.'
That marked change of tone was backed by Roy Hattersley, the former deputy leader, who said in a radio interview that Mr Smith would be 'mildly embarrassed' by stepping back on reforming the leadership election, which was not on the immediate agenda, but that it might be necessary 'to convince some people that it is not his intention to break the link with the trade unions'.
Mr Smith will not give any ground, however, on suggestions that the decision on parliamentary selections should be postponed until next year's conference.
Debate is continuing on a further possible inducement - keeping the 'levy-plus' payment to a modest or even nominal sum. But there were warnings yesterday that party finances 'must remain secure'.
The Amalgamated Engineering and Electrical Union - the only big Labour affiliate to support one member, one vote - yesterday announced a 75 per cent secret ballot vote for maintaining its political fund, all of which goes to the Labour Party.Reuse content