09/07/2013 04:29 BST | Updated 09/07/2013 04:42 BST

Ed Milband Set For Union Clash As He Unveils Party Funding Reforms

Trade union members will no longer be automatically signed up to the Labour Party under drastic reforms to be announced by Ed Miliband.

In the wake of the Falkirk ballot-rigging scandal, the Labour leader will use a keynote speech today to set out what aides are describing as the "biggest party reforms in a generation".

The changes are intended to strengthen the party's links with its individual members while diluting the influence of the trade union barons.

But it is likely to lead to a furious row with Labour's financial backers, with Unite leader Len McCluskey already announcing his opposition.

Ed is taking on the unions

Labour sources insisted that Miliband had always intended to deliver party reform, although there was no attempt to deny that the timing of the announcement was linked to events in Falkirk.

Crucially, however, it was emphasised that the changes would need to be "carefully implemented in detail and over time".

Miliband will not set out a timetable for reform but instead it is expected he will announce the appointment of a "senior party figure" to work through the process of putting it into practice.

Labour sources said they did not believe that it would require a change in party rules, although they suggested they could "formalise" the new arrangements with a vote at party conference.

"We would like to work with the unions and local parties to bring it about. We want to do it in a co-operative way but there are other ways in which you can do it," one source said.

However even before he delivered the speech, Len McCluskey, the general secretary of Unite - the union at the centre of the Falkirk row - indicated that he would oppose the plan.

Writing in The Guardian he said: "Switching to an 'opt-in' for the political levy wouldn't work - it would require Labour to unite with the Tories to change the law, would debilitate unions' ability to speak for our members and would further undermine unions' status as voluntary, and self-governing, organisations."

Under the proposals, the three million trade unionists currently affiliated to the party through the automatic payment of affiliation fees will in future decide as individuals whether they wish to do so.

In his address to the St Bride's Foundation in London, Miliband will call for an end to "the politics of the machine" - typified by events in Falkirk where Unite is accused of trying to pack the constituency with its members to secure selection of its preferred parliamentary candidate.

"What we saw in Falkirk is part of the death-throes of old politics. It is a symbol of what is wrong with politics. I want to build a better Labour Party - and build a better politics for Britain," he is expected to say.

Officials acknowledged that ending automatic affiliation - which raises £8 million-a-year - would represent a financial

"hit" for the party.

However Miliband will argue that it will also provide the opportunity to mobilise trade unionists to get them to become active in the party, involving them directly in its campaigning.

"The problem is not that these ordinary working men and women dominate the Labour Party - the problem is that they are not members of local parties, they are not active in our campaigns," he is expected to say.

Conservative Party Chairman Grant Shapps dismissed Miliband's plans as meaningless.

"Under Ed Miliband's weak proposals, including a code of conduct that already exists, it would still be the same old Labour Party - bankrolled by the unions, policies rigged by the unions and candidates chosen by the unions," he said.