ED MILIBAND is expected to set out significant changes to Labour's relationship with the trade unions in a keynote speech tomorrow.

The move comes as party grandee Lord Reid warned Labour would be condemned to political oblivion if the leader lost his struggle with Unite's Len McCluskey, .

After the selection row in Falkirk, which involves a potential police investigation, colleagues are urging Mr Miliband to redraw Labour's relationship with the trade unions, which bankroll the party to a large degree.

They also want him to make it clear he is in charge when it comes to running Labour.

Falkirk MP Eric Joyce, whose resignation from the party after a brawl in a Commons bar sparked the need for a new selection contest, said Mr Miliband needed a "proper victory to make clear that he's running the party and not Len McCluskey".

While the party leader insisted he wanted to "mend ... not end" Labour's relationship with the unions, the Unite General Secretary urged him to "step back from the brink of a ruinous division".

However, Lord Reid, the former Home Secretary and regarded as a founding Blairite, warned Mr Miliband the stakes were very high and he was now involved in a determining struggle about the direction of the Labour Party.

The peer said: "I am in no doubt the leader of Unite wants to impose an ideological direction on the Labour Party that would lead us into political oblivion, as it did in the 1970s and 1980s.

"Ed Miliband didn't particularly go looking for this fight; this fight came to him.

"But he understands, as everyone else in the Labour Party does, that a struggle of this nature, which is in essence political, is a determining struggle about the direction of the Labour Party.

"I have no doubt in my mind the direction in which Ed Miliband wants to move is (towards becoming) ... an open, modern, relevant party."

Harriet Harman, Labour's deputy leader, said the first move towards a "significant change" in the party's relationship with the unions was to impose a spending cap on selection campaigns.

She said this would strip the need for would-be MPs or senior party figures to rely on union funding or personal wealth; the Shadow Culture Secretary revealed she had to take out a second mortgage to fund her bid for the deputy leadership.

Other changes expected include a new code of conduct for candidates and a change to the system where trade unionists can opt into paying money to Labour rather than having to opt out as at present so they become individual donors.

There will also be a shortening of campaigns to lessen the influence of machine politics of the trade unions and the introduction of open primaries.

Mr Miliband said events in Falkirk had "betrayed the values of our party" and confirmed the public's worst suspicions: that politicians were in it for themselves.

Mr McCluskey insisted 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.

While Ms Harman was insistent that Falkirk was a one-off in terms of allegations of vote-rigging, the Tories kept up the pressure with Grant Shapps, the Conservative Chairman, urging Mr Miliband to come clean about the scale of the union-fixing problem.

Tory headquarters urged the Labour leader to freeze candidate selections until spending rules came into operation and refuse to take any more money from the unions until the funding system is fixed.

In a separate development, claims of a bid to oust Shadow Foreign Secretary Douglas Alexander as part of a redrawing of constituency boundaries were dismissed by Labour MSP Mary Fee as ludicrous.

Meanwhile, Alex Salmond urged Scottish Labour leader Johann Lamont to break her silence in the row over the selection of a Falkirk candidate.

He questioned the extent of her leadership, saying she has been silent and immobilised.