McCluskey threat overshadows 'Burnham for leader' campaign

Andy Burnham's campaign to become Labour leader gained considerable momentum over the weekend when he announced that Rachel Reeves, the MP for Leeds West, will lead his review of Labour's economic policy.

Reeves, a former Bank of England economist, is described by the Financial Times as "one of the most influential figures from the younger generation of MPs". She had been expected to back Chuka Umunna until he pulled out of the race on Friday, citing "uncomfortable" media scrutiny.

Burnham already has approximately 100 MPs on side, including Luciana Berger, "another fast-rising figure from the 2010 intake" as the FT calls her.

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Some within Labour believe Burnham is hoping to make such headway that none of his rivals can come anywhere near his level of support. To go forward to the final ballot, each candidate must have 34 MPs backing them – equivalent to 15 per cent of the 232 Labour MPs remaining after the general election.

However, Burnham comes with baggage – namely his relationship with the unions and specifically Len McCluskey, head of the Unite union.

McCluskey horrified Blairites yesterday by warning that Unite could withdraw its multi-million-pound support for the party if it fails to select the "correct leader" – in short, one who will champion "organised labour".

He told BBC Radio 5 Live: "It's essential that the correct leader emerges and that there's a genuine debate about the direction we're going in. It is the challenge of the Labour party to demonstrate that they are the voice of ordinary working people, that they are the voice of organised labour."

As the Daily Telegraph reports, McCluskey did not nominate a candidate, saying there would be a union-organised hustings. But most observers expect Unite to endorse Burnham (Yvette Cooper would be the likeliest alternative), while Burnham himself admitted to the BBC's Andrew Marr yesterday that he had spoken to McCluskey.

The Times reports that McCluskey's intervention has "worsened tensions within Labour, with Blairites warning that the party must not repeat the mistake of having a leader perceived as being too close to the trade unions. Ed Miliband won the job in 2010 as a result of union support."

Adding fuel to the fire, Tom Watson is emerging as the frontrunner in the race to become deputy leader. As the FT reports, Watson is a former flatmate of McCluskey's and is an ally of Michael Dugher, shadow transport secretary, who is co-ordinating Burnham's campaign.

Both Dugher and Watson were deeply involved in helping Ed Miliband beat his brother David to the leadership in 2010.

Harriet Harman, the acting Labour leader, will try today to put a lid on the union issue by saying that new "one-member, one-vote" leadership rules have taken away some of the unions' power.

"The winner of this election is not going to be the choice of the unions or any single section or faction of the Labour party," she is due to say. "He or she is going to be the choice of the Labour party."

Whether she can allay the fears of the Blairites, who had been banking on Umunna winning the leadership, is debatable. Referring to Watson and Dugher, one Blairite told the FT: "It feels like the same old machine that got rid of Blair, propped Brown up and stopped David getting in."