Former shadow work and pensions secretary Owen Smith joined Angela Eagle in seeking to unseat the veteran left-winger, declaring he would be a “radical and credible” leader who could take Labour back into power.
Mr Smith launched his bid the day after Mr Corbyn secured his place on the ballot paper for a contest expected to stretch through the summer, after the party’s ruling National Executive Committee (NEC) ruled that only challengers, and not the incumbent leader, have to collect 51 nominations from MPs.
The Pontypridd MP told BBC Radio 4’s Today programme that it was the right decision to ensure that Mr Corbyn can take part in the contest.
He accused some on the right of the party of acting in a way which could “split” Labour.
He said: “I will stand in this election and I will do the decent thing and fight Jeremy Corbyn on the issues, just as he will do with me, and at the end of that I will stand behind whoever the leader is.
“But I hope and I expect it will be me.”
Mr Smith’s announcement came amid reports that the NEC has suspended all local Constituency Labour Party meetings until the end of the leadership campaign following complaints of harassment and intimidation.
But shadow chancellor John McDonnell insisted that he expected an “amicable” contest which would focus on policies.
He denounced incidents such as the brick thrown through Ms Eagle’s constituency office window as “scandalous”, but denied they were committed by Corbyn supporters. Mr Corbyn had made clear that violence and bullying “should not be part of our politics” and any Labour member found responsible for such actions would be expelled, he said.
Mr McDonnell told a pro-Corbyn rally on Tuesday evening that opponents of the Labour leader had been “plotting and conniving” against him, adding: “The only good thing about it is that as plotters they were f****** useless”.
Speaking to the Today programme, he brushed off the comment as a “joke”, and insisted it was not directed at Ms Eagle, who until recently held the business brief in Mr Corbyn’s shadow cabinet, but at a “small group” of MPs who had never accepted the leader’s mandate and had been “plotting a coup” from the day of his election last year.
Mr McDonnell told Sky News that Labour members would have been “distressed” if Mr Corbyn was blocked from taking part in the election, adding: “This will be a democratic decision. Last year’s contest was amicable and I think it will be the same this time. Whoever emerges as leader, we have got to respect the decision of our members and unite behind them.”
In January this year, Mr Smith appeared to set his face against a challenge to Mr Corbyn, telling the New Statesman: “Jeremy is going to be taking us into the election in 2020. End of.”
But he told Today that he had decided to stand for the leadership after seeing a “dramatic collapse of faith and confidence in Jeremy” over “the last couple of weeks”.
There was now a “widespread belief now in the Labour Party that, whilst Jeremy is a good man with great Labour values who has done a lot for this party and changed the debate in this country about our economy and has been right about lots of things like anti-austerity, he is not a leader who can lead us into an election and win for Labour”, he said.
Mr Smith said the prospect of election victory was “distant” under Mr Corbyn and said he had met him on three occasions - as recently as two days ago - in the hope of persuading him to find a compromise to resolve the problem without a “divisive” leadership challenge, but had been rebuffed.
Describing Mr McDonnell as “part of the problem”, the former shadow work and pensions secretary said: “To John McDonnell I said I feared he had decided that people in his part of the party wanted to split the Labour Party and he shrugged his shoulders and said ‘If that’s what it takes’.
“I’m not prepared to stand by and let the Labour Party, the party I love and that has been the greatest force for good in this country, split. It cannot happen.”
He vowed: “I will never split the Labour Party. I will be Labour ‘til the day I die and I will stick with my Labour Party throughout.”
Mr Smith said he had never been part of “any plot or coup against Jeremy Corbyn”.
“I refused to have any part in discussions, which have been destructive, from a small group of people on the right who, just like those on the left, it seems to me, are now prepared to let Labour split.”
Mr Smith said Labour members would now have “a chance to hear about how I would be a radical and credible leader of the Labour Party and how I can heal our party”.
The Pontypridd MP is seen as being positioned to the left of Ms Eagle. But he also set out clear dividing lines with Mr Corbyn in his interview, saying he would vote to keep the Trident nuclear deterrent and would oppose attempts to hold Tony Blair in contempt over his decision to go to war in Iraq.