Labour hopeful risks union cash

David Miliband called for Labour to reach out to new donors after being threatened that unions may withdraw their funding for the party if the next leader does not abandon the pursuit of middle class voters.

GMB general secretary Paul Kenny said at the weekend that the unions would not tolerate a continuation of the Blairite centre-ground approach and the neglect of grassroots Labour concerns.

The cash-strapped Labour Party is almost entirely reliant on the unions to stay afloat.

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But Mr Miliband, seen as the front-runner to replace Gordon Brown as Labour leader next month, gave no ground to the unions and indicated he would be seeking donations from a much wider base.

"We need millions of people to give small amounts and we also need to reach out, to sort out the financial mess of the Labour Party, to make sure that we've got large donations as well," he said yesterday.

"We've got traditional supporters who have stuck with us but we also need to reach out.

"And I think it's very important that all shades of centre and centre-Left opinion, all those who oppose a Conservative government, find a home in the Labour Party."

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Emphasising that he had no intention of playing up to the unions, the MP for South Shields added that he had "an agenda that speaks to the country".

His comments come as the choice between him and his younger brother, Shadow Energy Secretary Ed Miliband, is increasingly dominating the Labour leadership debate.

The GMB is urging its members to vote for Ed Miliband, MP for Doncaster North, who has emphasised the need for Labour to re-engage with its core voters.

Asked whether the GMB would withdraw funding for Labour if Ed Miliband did not win, Mr Kenny said: "If the new leader offers us more of the same, many unions – including our own – would have to consider where we are at."

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He added: "The fundamental difference between Ed and his brother is that when David said 'Let's reach out to the middle classes' he made the same mistake as Tony Blair and Gordon Brown.

"Labour can't function without its grassroots."

The GMB has given more than 14m to Labour since 2001.

Meanwhile, fellow leadership contenders Ed Balls, MP for Morley and Outwood in West Yorkshire, and Andy Burnham, MP for Leigh in Greater Manchester, expressed frustration that the contest was being portrayed in its final stages as a duel between the two brothers.

Mr Balls insisted in a letter to party members that the election was not a "two-horse race" between the Miliband brothers.

The Shadow Education Secretary said Labour should not be forced to choose between "going with our hearts or our heads" – as the choice between Ed and David Miliband has been described.

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Mr Balls claimed he was capable of not only standing up for Labour members but also winning over the wider electorate to get the party back into power.

"Our party's choice mustn't be between being radical and being credible – or between going with our hearts or our heads. We should demand both," he said.

"The media and people in Westminster have been claiming for months it's a two-horse race. But not a single member has cast their vote yet and you deserve a proper choice."

His letter came days before voting finally begins. After months of debate and hustings, ballot papers will be sent out next week.

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The two Milibands appear to be making the running, on the basis of endorsements by fellow MPs and constituency parties.

However, the contest will be decided by a complicated electoral college in which second and third preferences may play a decisive role.