The move follows a fall in membership to a post-war low of 261,000 - despite a campaign launched three years ago to push it to one million - and an official description of the party's finances as 'grim' and 'desperate'.
The national executive faced furious opposition yesterday over its plan to raise individual membership from pounds 15 to pounds 18 - an 80 per cent increase over two years - to let it pay off a pounds 2.5m overdraft. Even with the extra cash, jobs will have to go as expenditure is cut by 30 per cent.
A dozen delegates queued to oppose the increase, warning it would cut membership further and could hit the party's standing order sponsorship scheme which, at pounds 5 a month, has raised pounds 2m. As the conference took a vote on the increase, the result of which will be known today, Anne Belworthy from Canterbury warned: 'We cannot be sponsors as well as high subscription payers.'
The experiments to boost membership come as John Smith and his close lieutenants Tony Blair and Gordon Brown aim to build a mass party, and as Peter Mandelson, MP for Hartlepool and former communications director of the party, said its culture must change if it is to win more members and seats.
Writing in Fabian News, he said too many members on joining 'feel ignored, frozen out of decision-making or put off by boring meetings dominated by sterile procedures. Most remain inactive because local campaigning is sporadic. They might as well have stayed in front of the telly with a six-pack, watching the lastest video for all the difference joining the party makes'.
His six-point plan to change includes cutting the joining fee and making it income-related; radically switching resources from the centre to the regions; restoring emphasis on face-to-face recruitment; and more political and social activity by executive committees which would involve members in more open policy discussion locally.
Labour, he said, 'must become a better party to become a bigger party' and should 'throw open its windows locally' to change its style of business. 'We will only win the trust and support of those who remain sceptical if they see in us a party with more members who speak their language and share their aspirations.'
The membership debate came as it emerged that the unions are soon likely to contribute less than half of the party's day-to-day finance - a fact that will be used by those seeking to cut the union vote.
Sam McCluskie, the party treasurer, said the main reason for the financial crisis was the fall in trade union membership. Union affiliations had fallen from 6.25 to 4.5 million since 1987 and their contribution to the general fund had dropped from 88 to 55 per cent. But he warned against the 'stupid nonsense' from people who wanted to loosen the union link. Even with declining membership and their own financial problems, the unions were still vital to Labour's finances and still rallied to Labour.