Labour is to impose a spending cap on selection campaigns as part of a "significant change" in its relations with trade unions, Harriet Harman said as the bitter public feud with the party's biggest union donor over allegations of ballot rigging continued.

Ms Harman said the move would strip the need for would-be MPs or senior party figures to rely on union funding or personal wealth as the party sought to deal with the damaging row sparked by claims of criminal actvity in Falkirk.

Ed Miliband said today he wanted to "mend...not end" Labour's relationship with the unions as he came under renewed assault from the general secretary of the giant Unite union Len McCluskey.

Mr McCluskey urged him to "step back from the brink of a ruinous division" and stop "playing into the hands" of the Tories after the party referred alleged irregularities in the Falkirk selection to the police.

He told the Sunday Mirrror he would not apologise for efforts to "reclaim Labour" from an "out of touch elite" but renewed his insistence that Unite was not guilty of any criminal wrongdoing.

Mr Miliband is expected to make a speech this week setting out reform plans he said would give greater prominence to individual union members but denied suggestions he would end Labour's historic formal links with the union movement.

Writing in The Observer, Mr Miliband said events in Falkirk "have betrayed the values of our party" and confirmed the public's worst suspicions that politicians were "in it for themselves".

Reforms to be announced soon would ensure future selections "are always fair, open and transparent", he said, making sure the Falkirk episode "never happens again" and making Labour "more worthy of your trust".

Ms Harman said the party leader was "looking at the rules and working out how best they should be".

"The relationship between the unions and the Labour Party is important...the voice of people at work having their voice heard in the corridors of power," she told BBC1's Andrew Marr Show.

"But we also have to modernise the system.

"Things like a cap on spending will be a significant change for the right reasons. It is very important that people cannot be ruled out of a contest because they can't get the backing of a union or have their own independent funds."

She said that she had been forced to take out a second mortgage on her home to fund her campaign to be deputy leader because she was not backed by a union.

"Most people are not in a position where they can actually do that."

The row has plunged Mr Miliband into the most testing challenge of his leadership - with the Conservatives exploiting it to press home claims that he is too "weak" to stand up to the party's significant financial backers.

The Tories have also called on Labour to reveal the extent of union efforts to recruit large numbers of their supporters to local parties after an official Unite document showed it was targeting a total of 41.

Ms Harman said that the particular issue in Falkirk - related to a now-axed scheme allowing unions to pay the party membership fees of people it recruited for an initial period - was an isolated case and now "dealt with".

But she said that there were also "a number of constituencies where for different reasons issues are being looked into."

She dismissed claims that the row had made Mr Miliband appear too weak to deal with Labour's significant union financial backers.

"He's not. He'a actually stepped in to take the action that's necessary and he is going to take further action to make sure that we keep that link with people at work and make sure we are in touch with ordinary people's lives but we also have clear rules to make sure those rules are not abused."

"It is not a great public spat between the leader and the unions. There is a public argument about Unite and Falkirk and Ed Miliband is absolutely right that he is upholding the rules on that.

"There isn't going to be any argument, the rules are going to be upheld."