The country’s third-biggest union could soon deliver one of the biggest blows yet from the unions to Labour by cutting itself off from the Party.

The warning from Britain’s General Union, the GMB, comes as the Government faces a serious disagreement with the unions amid threats of strike action over public sector pay.

Paul Kenny, the general secretary of the GMB, told The Times that the union could consider disaffiliating itself in frustration at the Government’s policies, Gordon Brown’s threats to change the role of the unions in the party’s constitution and Labour’s lack of political influence outside England. If the GMB was to disaffiliate itself it would be the biggest desertion from the Party by a union and would deprive Labour of about £2 million a year in affiliation fees, election funding support and other donations.

Mr Kenny said: “The question that is facing us is the funding of political parties and what the trade union involvement is in that, whether in fact unions should affiliate to the Labour Party.” Fears that the GMB could disaffiliate itself from the Labour Party come as Mr Brown delivers his first speech to the Trades Union Congress as Prime Minister today.

The prospect also follows warnings from John Hutton, the Secretary of State for Business, that Labour would not govern on the basis of vested interests such as the unions.

The unions are concerned about Mr Brown’s plans to alter Labour’s constitution at its party conference so that contemporary motions, which are used by the unions to raise their issues, are not voted on.

Mr Kenny said that Labour’s lack of control in the governments of Scotland, Wales and Northern Ireland also created problems because unions needed to have a relationship with parties that can make policies.

Labour’s difficulties were compounded yesterday when it was warned of a coordinated fight over public sector pay. Mark Serwotka, general secretary of the civil service union PCS, said that a national strike ballot was likely after members said that they wanted further action in a dispute over pay, job cuts and the use of private companies in public services.

Local government workers are to be balloted for strike action after a revised pay offer of 2.45 per cent was rejected. Unison, the biggest public service union, will also announce the results of a ballot of health workers on a new pay offer.

Union leaders condemned the Government’s determination to cap public sector pay at 2 per cent while city bonuses and executive pay soared. Brendan Barber, the General Secretary of the TUC, called for tax loopholes which favour private equity to be closed.

He said: “Today a significant group of super-rich float free from the rest of society.”

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