Miliband backs cuts despite union threats to pull cash

Miliband: 'I'm not going to make promises that I cannot keep' (Getty Images)

Ed Miliband warned trade unions last night that he would not back down over Labour's tougher commitment to spending cuts despite their threats to cut their financial support to the party.

Mr Miliband faced the biggest challenge to his authority since becoming party leader as union leaders vented their anger over Labour's call for the Coalition's public sector pay constraint to be extended to protect jobs.

The GMB joined Unite in accusing the Labour leadership of embracing the Coalition's cuts after Labour confirmed it could not promise to reverse all of them if it wins power.

Paul Kenny, the GMB leader, said Labour's change of stance could have a "profound impact" on the relationship with the union. In a letter to senior GMB officials, he said: "It is now time for careful consideration and thought before the wider discussions begin on the long-term implications this new stance by the party has on GMB affiliation."

Although Labour relies on the unions for about half its total income and more than 80 per cent of its donations, Mr Miliband hit back by vowing that he would not bow to threats that they would move away from the party.

"They have to make their own decision. I am not going to change my policy in the face of threats. I am going to do the right thing," he said. "Of course there are going to be some people in the party who don't like it but I'm afraid that's tough."

Mr Miliband defended Labour's refusal to pledge to reverse the cuts but went further by urging unions to negotiate pay-restraint deals to limit job cuts.

The dispute flared up after Len McCluskey, Unite's general secretary, suggested Labour's support for a pay freeze would mean "certain election defeat" and could even put Mr Miliband's survival as leader at risk. However, Mr Miliband's allies hope his tough response will entrench his position.