But it has now emerged that a further, and more concerning, draft of the agreement has been developed which outlines how the two groups plan to dominate the affairs of the Victorian branch of the party – and its role in the national party structures.

The latest draft of the agreement says that "Centre Unity [CU] and the Industrial Left [IL] commit to cooperation in all Victorian Labor Party forums, such as State Conference (including elections at State Conference), Administrative Committee, POSC and FEA Elections".

"This cooperation includes supporting each other's candidates and preferencing each other before other grouping in party elections (not just pre-selections).

"In relation to Victorian ALP National Executive positions, the CU and IL will support each other to ensure state proportional representation is achieved by both groups."

To make the new system work – which the agreement calls the Alliance - there will be an Alliance Council, and "an Alliance Executive will be established to manage and attend to the day to day affairs of the Council".

"The Executive shall comprise the two IL Co-convenors and two nominees from the CU signatories. The Executive shall meet at least monthly and the respective representatives from each group are expected to report back to their constituents."

A senior Labor source told the AFR Weekend the proposal "effectively creates a shadow party inside the Labor Party".

"It's extraordinary, the source said. "It effectively means there is no role for the rank and file of the party. These unions represent no rank and file members".


The revelations are likely to only further alarm Mr Shorten's colleagues who are aghast at his apparent complicity in the negotiations.

A source close to Mr Shorten dismissed the idea that the Opposition Leader was involved, or was supporting, an agreement that would, amongst other things, threaten the pre-selection of some of his frontbenchers.

"There was nothing to it - this idea that he's signed up to some deal is bullshit", the source said.

"People are getting worked up over nothing - Bill has stepped back from active faction matters since becoming leader and intends to continue that approach.

"The party has been united under Bill and he's not about to do anything to change that.

"He doesn't support anything that will see sitting MPs get knocked off. His absolute priority is seeing sitting MPs re-elected."