Tom Watson argued that “the last thing” Labour needs “is another faction” as he spoke at a packed inaugural meeting of his Future Britain grouping, which he said was instead aimed at uniting social democrats within the party.

The Westminster meeting was attended by about 90 MPs and peers, including at least a dozen current frontbenchers and former senior figures including Neil Kinnock, Peter Mandelson, David Blunkett and John Prescott.

Watson, Labour’s deputy leader, was one of the few present to mention Jeremy Corbyn, arguing that he was behaving similarly to the way he had during his time as a backbencher when the party was led by Tony Blair and Gordon Brown.

“Jeremy, to his credit, kept the voice of his tradition alive through the campaign group during the New Labour years. So he understands the need for those from the social democratic and democratic socialist traditions to give ourselves the strongest voice we can,” Watson said.

But the meeting follows a period in which Watson has sought to assert himself as a counterweight to Corbyn, prompting speculation about whether the deputy was hoping to build up a bloc to oppose or even threaten the leader.

Frontbenchers at the meeting included the shadow transport secretary, Andy McDonald, the shadow justice minister, Gloria De Piero, and the shadow local government minister, Jim McMahon. Former frontbenchers included Caroline Flint, Hilary Benn, Rachel Reeves and Liam Byrne.

Labour MPs present said the group intended to develop domestic and foreign policy with the aim of feeding ideas into the party’s established policy processes, including the leadership and national policy forum.

Darren Jones, the MP for Bristol North West, said Future Britain would not behave like a caucus and attempt to vote as a block in parliament as the hard-Brexit European Research Group (ERG) of Conservatives does.

“We are not the ERG; we are not a party within a party. We are a coming together of all of the wings of the Labour party. Our fundamental work will be on policy,” Jones said immediately after the meeting.

Future Britain aimed to bring together the old Blairite and Brownite wings of the party, Jones added. “This is about a coming together of the TBs and GBs.”

Even some of Watson’s supporters remain unsure of his ultimate intentions and are sceptical about the wisdom of directly taking on Corbyn while the party membership is dominated by his supporters.

“It’s one thing to have a group of sympathetic MPs but we don’t want to go through what happened in 2016 again when people thought it was a good idea to challenge the leader,” one MP said.

Those present said at the meeting said it was better attended than the weekly session of the parliamentary Labour party that followed it at 6pm, at which John McDonnell gave a briefing before Wednesday’s spring statement.

However, sources close to the party leadership said they were relaxed about the new group. They said: “Huge advances in policy have been the hallmark of Jeremy’s leadership, exciting millions across the UK. If this group contributes to that, good. The proof will, of course, be in the eating.”