Miliband plans 'one member, one vote'
Crunch time for Ed Miliband, who is on the brink of making what could be the biggest decision of his leadership so far.
At stake? Labour's complicated and intimate relationship with the trade unions. Newsnight understands he is ready to unveil his long-awaited proposals to transform it.
One senior party figure described it as "potentially bigger than Clause 4". Another, with serious concerns about Mr Miliband's proposals - and a taste perhaps for the dramatic - said "it could alter the course of history".
Mr Miliband has been under pressure over the unions' grip on the Labour Party - exerted both through the £8m they contribute to party coffers each year and their role in choosing Labour leaders - since he beat his brother to the party leadership, largely thanks to the votes of unions who currently account for one-third of the electoral college that chooses Labour leaders.'Fundamental change'
And last summer, after the disaster that kept giving that was Falkirk - when Unite was accused of attempting to rig the process to select a Labour candidate in the by-election - Ed Miliband stood tall and declared it was time for change.
He promised two key things: that union members would in future be asked to make a deliberate choice to back the party - what is termed "opt-in" support - as opposed to the automatic levy on each union member.
And he accepted that there could be wider questions asked about the size of the union vote at party conference and the make-up of Labour's electoral college.
Newsnight understands that the final arrangements for the reforms are being finalised right now - before they go to the National Executive Committee this weekend for approval.
Some senior figures who worry about the unions' grip on the party fear that a move aimed at diminishing organised-Labour's influence could end up handing them even more power than they had before”
We've learnt that the way Labour leaders are elected will fundamentally change.
Under the reforms, I understand that the party will move to a so-called one member, one vote system for choosing the Labour leader.
MPs and MEPs, who currently have a third of the votes in the leadership election, will be relegated to a role in shortlisting candidates, a move likely to cause a backlash among Labour MPs.
Each of the roughly 200,000 Labour members will get a single vote in choosing the leader, but so will a new class of so-called associate members - paying a membership fee of just £3 a year. And here's the catch: any trade unionist will be able to activate their right to become an associate member and vote in this election. And there are some 2.7m of them.
What consequences will this have?
Some senior figures who worry about the unions' grip on the party fear that a move aimed at diminishing organised-Labour's influence could end up handing them even more power than they had before: although they will lose their block votes, some fear that the unions will use their formidable organisation machines to register large numbers of associate members, and then attempt to influence their votes.
As one party figure put it: "If just one in 10 trade unionists becomes an associate member, the unions will effectively control a majority of votes in a Labour leadership election." Another former minister said: "We'll be a laughing stock."'Five-year process'
But supporters of the reform insist the suggestion that the unions would be able to exert greater pressure in the new system is naïve because union members take relatively little notice of the endorsements of their leaders.
One party insider said there has been a fierce debate within the Miliband circle between those who believe that the reforms are a key test of his leadership and that a failure to introduce radical change would substantially damage his credibility - and those who feel he risks putting the party's financial viability at risk by allowing union members to opt out of their so-called political levy contributions to the party. "They say you just can't crater the party's finances," said one insider.
What of the opt-in funding mechanism? Much is still unclear here although it is understood it would be very difficult for Ed Miliband to go back on his words last summer where he declared "in the 21st Century it doesn't make any sense for anyone to be affiliated to a political party unless they have chosen to do so".
But in order to stop the coffers running dry in one fell swoop, it's understood the plan will be rolled out over a five-year process .
One senior figure concerned over the proposed changes told me: "There is a real irony that what started out as a reform to diminish union influence could end up as a reform which diminishes MP influence and increases union influence."