TUC pledges to stand by Labour

Union leaders claimed today they would stump up cash to help bail out Labour from its financial crisis - but fiercely rejected moves towards state funding for political parties.

According to leaked documents. Labour is £6million in the red and is thought to be losing more than ? 1million a year as party chiefs try to keep the lid on spending.

The party's ruling National Executive committee is to debate a proposal to raise full membership fees from £18.50 to £24 and reduced rates for pensioners and jobless from £7 to £12.

Union chiefs pledged they would carry on supporting Labour financially despite a growing row about Tony Blair's policies between ministers and a new breed of Left-wing union chiefs - as well a wave of industrial militancy gripping the country.

However, they came out firmly against state funding, a system which would effectively put paid to any influence they had over Labour.

GMB leader John Edmonds claimed such a move would spark a "revolt" among voters. He added: "They want their taxes spent on schools and hospitals, not on party political broadcasts or posters showing William Hague with a Thatcher hairdo."

Derek Simpson, confirmed as the new leader of the Amicus manufacturing union after key Blair ally Sir Ken Jackson threw in the towel at the weekend, said: "I am a supporter of the Labour government. I do not think it needs financial pistols at the head. I do not expect special favours."

But he added: "I do expect that the views of our members will be listened to and it will be my intention to make sure those views are put firmly and fairly."

TUC general secretary John Monks said he was sure unions would go to Labour's aid "the way they nearly always do". The unions had propped up a "centre-Left party" in troubled times, donating £100million during Labour's wilderness years, between 1983 and 1997, he said.

Many leaders want Mr Blair to appoint a "minister for unions", the favoured candidate being Ian McCartney, Pensions Minister.

The NEC is also scheduled tomorrow to vote on Ken Livingstone's re-admission to Labour two years after he left the party to fight for the post of London Mayor as an independent.

Some weeks ago it was thought the Mayor's application would be rejected by a comfortable majority among the NEC's 32 members, but supporters of the Left-winger's return claim to have made progress in recent weeks.