Mr Ramon's victory is expected to hasten a realignment in Israeli politics, in tandem with the country's progress towards peace.
Doves such as Mr Ramon have argued for some time that the peace process is now irreversible and Israel should, therefore, put domestic issues - rather than security - at the top of its agenda.
'After 45 years of war, with priorities dictated by security, he is saying peace is now an accomplished mission: let's look at the social agenda, at the economy and trade,' says Avraham Burg, another Labour Party dove.
To test his support, Mr Ramon defected from the ruling Labour Party last month, launching a daring challenge for leadership of the Histadrut, Israel's trade union leviathan and the bastion of the socialist conservatism which he seeks to reform. His message to the 1.6 million eligible voters was simple: Bolshevism and socialism must be consigned to Israel's dustbin of history; social democracy is the way of the future.
Yesterday's early results showed Mr Ramon had won at least 45 per cent of the vote, with Labour gaining only 33 per cent. The victory staggered commentators and shattered Labour which has dominated the Histradut since it was founded in 1920.
In 1996, the date of the next general elections, Israelis will vote directly for the prime minister, at the same time as parliamentary elections are held. Some commentators believe Mr Ramon is already planning then to challenge the Prime Minister, Yitzhak Rabin, when the Labour veteran will be 74, and Mr Ramon will be 44. Others, however, believe Mr Ramon will hold off from a direct challenge for the leadership, concentrating first on building a new centre-left power bloc in the Knesset.
'Ramon is now clearly Mr Rabin's heir-apparent. He has taken over the most powerful political machine in the Middle East. It is a revolution in Israeli politics,' said Deniel Ben-Simon, political correspondent of Davar newspaper, which is associated with the Labour Party.
Mr Ramon's Histadrut victory illustrates how hungry many Israelis are for social reform. Before the state of Israel was founded the Histradut was established as a pillar of the new Zionist enterprise: a Jewish labour federation for Palestine.
David Ben-Gurion was general secretary of the Histradut before he became Israel's first prime minister. He said he envisaged the body as 'a kind of workers' state'. The Histradut emblem is still the hammer and sickle. Over the years the organisation has stretched tentacles into almost every walk of Israeli life, building an economic, social and political empire, representing the majority of workers, and controlling banks, factories and farms. Although its economic power has declined in recent years, its political clout remains enormous.
Israel, meanwhile, has been fast developing a 'me-generation' and a consumer orientated middle-class, which sees little use for such old- style egalitarian institutions. When, as health minister last year, Mr Ramon proposed removing the Histradut's monopoly of health insurance he won widespread popular support. 'What Ramon's reforms represent are a Thatcherite turning- point. She broke the miners' strike - and Ramon is breaking the Labour movement here,' says Mr Burg. 'Israel is going through the same battle that other countries have gone through - moving to social democracy. We are joining the club.'
While Mr Ramon has made social reforms his priority, he has often taken extremely dovish positions on the peace process. Mr Rabin has started the ball rolling towards Palestinian self-rule and it could be Mr Ramon who then picks it up and rolls it towards a Palestinian state. Mr Rabin has refused to countenance full Palestinian independence. But Mr Ramon has advocated statehood in the past, and, if he becomes prime minister, is more than likely to do so again.
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