Scottish Labour delegates have rejected a rebel motion calling for the UK to rejoin the single market and instead rallied behind Jeremy Corbyn’s pro-Brexit strategy.



The party’s conference in Dundee voted overwhelmingly for a “unity motion” drafted by its Scottish executive after deep divisions over Corbyn’s proposals emerged between the party’s centrists and the Labour leadership.



The vote, which endorsed Corbyn’s pledge to oppose Brexit if the deal failed to protect workers’ rights and included full access to the single market, came as John McDonnell, the shadow chancellor, pledged £70bn in extra spending for Scotland.



McDonnell sought to shore up Labour’s promises to reinvest heavily in the economy and public spending after Brexit. He promised £30bn in extra in spending on public services in Scotland and £40bn on infrastructure over the next decade, financed by heavier taxes and borrowing.



Giving the closing conference speech, McDonnell hinted at the Labour leadership’s central arguments against the EU. “Both north and south of the border, lives have been destroyed and millions left in despair thanks to the failed economic dogma of neoliberalism and austerity. Austerity was always a political choice, not an economic necessity,” he said.



Before McDonnell spoke, there were repeated clashes over Corbyn’s decision to reject any formal continued membership of the single market or the customs union, on a similar footing to Norway.



In the run-up to Sunday’s vote, officials close to Corbyn and the Scottish Labour leader, Richard Leonard, had accused the pro-EU grouping of using the issue to mount a proxy war by Labour’s moderates against the party’s leadership – a charge they deny.



The spokeswoman for Scottish Labour’s single market campaign is Kezia Dugdale, the former Scottish Labour leader who had opposed Corbyn’s leadership bid.



One pro-EU speaker, Donald MacKinnon from the Western Isles, said leaving the single market would be catastrophic for the Hebridean economy by increasing the costs of its exports of products such as Harris tweed and by removing EU subsidies.



John McDonnell, the shadow chancellor, promised the Scottish Labour conference an extra £70bn in spending for Scotland. Photograph: Aaron Chown/PA

To applause from some delegates, MacKinnon accused party leaders of “perpetuating myths” that the EU’s rules prevented the UK from renationalising industries or using state aid to invest in others.



He attacked the Scottish executive’s decision to put its unity motion to a vote first, which meant the rival pro-single market motion would fall.



He said his constituency party would abstain from the vote. “The SEC shouldn’t have interfered with the democratic process of conference,” he said.



Catherine Stihler, a Scottish Labour MEP who has championed continued single market membership, urged Labour to embrace a Norway-style option of joining the European economic area (EEA), as that had the greatest chance of protecting jobs, wages and production.

She said the party had to remember a large majority of Scottish voters had backed remain at the 2016 referendum. “Remaining part of the single market is the only way we can mitigate the worst effects of leaving the EU,” she said.

John Erskine, a delegate from Inverness, backed her up. Citing analysis that said Brexit would cut economic output by 9%, Erskine said: “Let’s be clear, there is no leftwing case for Brexit. It is a myth.”

Their complaints were rebutted by a series of speakers who had supported Corbyn’s leadership. Rhea Wolfson, a leftwing member of Labour’s national executive, said the party had to prioritise unity if it wanted to win the next election.

Echoing several other speakers, Wolfson insisted the six tests laid out by Keir Starmer, Labour’s shadow Brexit secretary, on protecting jobs, the economy and a tariff-free deal, protected Labour’s values.

“The Labour party has to be realistic with its intentions, and clear with the public: Brexit is happening, but we will do everything in our power to prevent the shambolic crash-out that the Tories would bring,” Wolfson said.

Neil Findlay, Scottish Labour’s Brexit spokesman, said many Norwegians disliked their EU arrangements as Norway had little say over single-market policy. “It means you’re a rule-taker and not a rule-maker, and that is not in our national interest,” Findlay said.