Ed Miliband was warned by a former Cabinet minister today that Labour risked being consigned to "the graveyard" unless he tackled union influence over the party's direction.
Labour has been thrown into turmoil over the choice of an general election candidate in Falkirk amid accusations of ballot-rigging by Unite, which is Labour's biggest donor.
One senior party figure told the Independent: "It was all very depressing - I thought we had seen the end of that sort of thing 20 years ago."
David Blunkett, the former Home Secretary, urged the party to release the conclusions of an internal report into alleged wrong-doing in the constituency.
He said Labour had reacted swiftly to that controversy, but added that Mr Miliband had to intensify efforts to distance himself from its biggest union backers, which helped him win the leadership.
"The trade union vote of their members was very decisive. Perception really matters, I'd be daft to suggest that it doesn't. We can't have a go at the vested interest of the Tory party if we don't clear our own house," Mr Blunkett told BBC1.
"We shouldn't be afraid of ideas and policy. At the moment, if we are afraid of those and the idea of looking to the future and being radical then, I'm afraid, we'll be the party of the graveyard and none of us want that."
The party's National Executive Committee put the Falkirk Labour Party into "special measures" following allegations Unite had been recruiting union members to the local party and paying their fees for them.
The claims are strongly denied by the union and its general secretary, Len McCluskey, has threatened legal action.
It suggested the moves followed a speech by the Blairite former Cabinet Minister, Lord Mandelson, in which he condemned "blatant attempts to manipulate the process by trade union machines".
It said: "Unite believes this is at its heart a political issue over the future of Labour as a party which reflects in its parliamentary make-up those working people it seeks to represent and is not the exclusive preserve of a self-selected metropolitan elite."
Grant Shapps, the Conservative chairman, said: "Day by day an unaccountable and unelected union baron is strengthening his vice-like grip on the Labour Party.
"If Ed Miliband won't stand up the likes of Len McCluskey in his party, there's no way he could stand up for this country's interests."