The unions will be warned today that their historic links with the Labour Party could be under threat unless they face up to the need to reform.
David Coats, a former TUC economics chief, says they could lose their voting power at Labour conferences if they fail to check the fall in their membership.
He also argues that the hardline language adopted by some left-wing union leaders threatens to alienate potential recruits, who are put off by the "rhetoric of struggle, strikes and strife which has little appeal to employees who care more about 'getting on' than 'getting even'."
Such an adversarial approach reinforces the view that "unions are stuck in the past, fighting battles in a class war that has little relevance to most people today".
Although union membership has halved in 25 years, Mr Coats says decline is not inevitable, pointing out that two-thirds of employees say they want a collective voice in the workplace. But he argues that the unions need a "clause four" moment to show they have adapted to the modern workplace.
In Raising Lazarus - the future of organised labour, a pamphlet published today by the Fabian Society, Mr Coats points to the success of smaller, specialist unions in changing with the times. And he is sceptical about the mooted "mega-merger" of the TGWU, GMB and Amicus unions.
He writes: "It constitutes an essentially defensive strategy, which may lead to internal squabbling just when attention should be directed outwards."
Mr Coats, the TUC's head of economic affairs between 1999 and 2004, says the unions must appeal to the "top and bottom" of the labour market, to "McJobs at McDonalds and MacJobs at Apple". They also need to build a "progressive consensus" with the Government, abandoning confrontation for a dialogue on such issues as discrimination.