Former home secretary Alan Johnson has launched a furious retaliation against Ed Miliband's union critics, branding them "delusional".

The MP backed the Labour leader after senior figures vented their anger over his decision to embrace austerity measures, and suggested that financial support for the party could be withdrawn.

Unions affiliated to Labour have been fuming since shadow chancellor Ed Balls said that he would not promise to reverse Government cuts or lift the 1% pay cap on public sector workers.

Unite leader Len McCluskey went public with his anger, using a newspaper article to warn that Mr Miliband was setting Labour on course for electoral "disaster" and undermining his own leadership.

And GMB general secretary Paul Kenny wrote to the union's senior officials saying that Mr Balls's speech could have a "profound impact" on its relationship with the Labour Party.

But Mr Johnson - himself an ex-union general secretary - said Mr McCluskey's intervention reminded him of a culture "the movement had escaped".

"According to Len, by trying to position Labour as a credible alternative to the coalition, Ed Miliband has set it on a path to 'destruction'," the MP wrote in the Guardian.

"Stuck in a familiar groove, Len goes on to suggest that all the ills that he claims are befalling Labour are because of actions of so called 'Blairites' - those terrible people who introduced the minimum wage and increased the number, the stature and indeed the pay of public sector workers across the country."

He went on: "Ed has stated a simple fact; that a Labour government will not be able to reverse as many of the cuts the current government is making unless it can show where the money is to come from.

"The difference between Len's position and Ed's is that Len believes a political party can win an election on a platform of promising no cuts, no job losses and continued levels of public expenditure. That is the policy of the delusional left who will never again win the public's trust.

"The trade union movement lost its way in the late 1970s when it opposed the minimum wage and supported the closed shop. It needs to recognise that Ed Miliband's vision of a better future requires a change of mindset throughout the party if we're to spend one term in opposition rather than a decade."

Mr Johnson resigned as shadow-chancellor a year ago, and has rarely intervened on high-profile issues since. Many backbenchers will hope that his latest foray signals a permanent return to the front line.

Mr Miliband mounted his own robust defence earlier, telling critics he was determined to "do the right thing by the country" and if they did not like that, it was "tough".

He called on public sector workers to "prioritise jobs over pay" and accept wage restraint in order to avoid redundancies and cuts to services.

"Let's do it in a fair way, but let's preserve jobs and services," he said. "I think most people will think it is the right choice."

Asked about the prospect that unions, which between them provide the bulk of Labour's funding, might disaffiliate from the party, Mr Miliband said: "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 added: "Of course there are going to be some people in the party don't like it but I'm afraid that's tough. We need to do the right thing, the responsible thing and that's what I'm going to do."

Mr Miliband said that Labour continued to believe that the Government was going "too far and too fast" in imposing cuts on public services.

But he said that Chancellor George Osborne's Autumn Statement had made clear that the failure of coalition economic policies would mean Labour inheriting a deficit if it returned to power in 2015.

"Given the economic mess they are creating and the economic mess we will inherit if we win the next election, it would be irresponsible for us to promise now to reverse these cuts in three and a half years' time," said Mr Miliband.

"We have got to convince people of two things at the next general election: that we are on their side and will do more for them than our opponents; but also that we can do so in a fiscally credible way.

"That has always been a challenge for the Labour Party. It's a challenge I am determined we will confront and surmount."

Asked if he ever thought the party might do better if he stood down as leader, Mr Miliband responded: "That doesn't arise."

In his article in The Guardian, Mr McCluskey warned: "Ed Balls' sudden weekend embrace of austerity and the Government's public sector pay squeeze represents a victory for discredited Blairism at the expense of the party's core supporters.

"It also challenges the whole course Ed Miliband has set for the party, and perhaps his leadership itself."