BRITISH opposition leader Ed Miliband has proposed to overhaul his Labour party's historic relationship with the trade unions, risking millions of pounds in political donations.
The unions helped found Labour in 1900 but Miliband vowed to end the process by which union members are automatically affiliated to the centre-left party unless they opt out.
The changes follow a row over efforts by Britain's biggest union, Unite, to get its favoured candidate chosen to contest an upcoming parliamentary by-election in Falkirk in Scotland.
"In the 21st century it just doesn't make sense for anyone to be affiliated to a political party unless they have chosen to do so," Miliband said in a speech to party activists in London.
Labour currently nets a reported STG8 million ($A13 million) a year from almost three million union workers - the majority of the party's funds.
Miliband is particularly sensitive to criticism about union influence after their support helped him beat his older brother, ex-foreign minister David Miliband, to the Labour leadership in 2010.
He admitted the proposed change had "massive financial implications" for a party which has struggled to attract private donations since losing the last election that same year.
But Miliband said he wanted to create "a modern relationship with individual working people" and said he hoped it would encourage a more involved, grassroots activism.
Miliband acknowledged the reform could face opposition from the unions but said he hoped to push it through by the next election in 2015.
Unite general secretary Len McCluskey, who has been embroiled in a war of words with the Labour leadership in recent weeks, initially appeared to criticise the plans but later took a more conciliatory tone.
"As far as Unite is concerned, we are more than happy to engage in the discussion with him," he told the BBC.
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