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Ed Miliband had no idea what he was doing when he decided to reform Labour’s links with the unions, GMB chief Paul Kenny said today.

Mr Kenny was speaking after crisis talks at the Leader of the Opposition’s Westminster office suite which followed his threat to cut the union’s donations by £1million.

Both sides insisted that the head to head meeting was cordial and constructive.

But a spokesman for Mr Miliband insisted that he was determined to introduce an “opt in” system that stops union members automatically affiliating to Labour.

And Mr Kenny said that the Labour chief was only just starting to grasp what he had done.

“The scale of the issues on the table are probably only just beginning to be realised by all parties,” he said.

Mr Kenny added: “He understood that there were a lot of concerns about the union’s future engagement on a collective basis, no doubt he’ll go away and think about that.”

He also suggested that the Labour leader only had himself to blame for the GMB’s decision to slash funding.

“What’s all the fuss over? All we’re doing, if you like, is going towards what Ed says he wants,” he said.

Ending automatic affiliation could cost the party up to £9 million.

The GMB has pre-empted the change by slashing the fees paid to Labour from £1.2m to £150,000.

Former Labour campaigns chief Tom Watson today repeated his warning that Mr Miliband was taking a “terrible risk”.

“The decision by the GMB struck me as being quite historic. They are disengaging. They don’t feel like valued partners any more.

“It’s also a great worry for the Labour Party. That [union] link, though it has caused tensions, has sustained Labour through good years and bad.

"To lose that would be a shame.”

Unions opposed to the Labour Party’s planned funding reforms fear the changes will relegate them to “placard carriers and cheque writers.”

A senior Labour source said the meeting was “constructive and businesslike”.

The source said: “Ed made clear he was determined to press ahead with the reforms.

“Ed made clear he is determined to create a modern, open and transparent link with our affiliates.”

Union officials believe the reform will weaken the historic link between Labour and the unions, and even threatens to sever it altogether.

A union source said: “Trade unions are collective bodies and affiliate to Labour as the best way of campaigning for social change and justice.

“Each year, union members support the principle of affiliating to Labour and spending money on the basis of a collective structure.

“Under the changes, things are transferred to individual members.

"The vision seems to be: ditch the affiliation but don’t ditch the unions altogether. Our role would be one of placard carriers and cheque writers.”

Labour said its biggest financial contribution comes from small donations and members, adding that the affiliation fund issue was a matter for the GMB.

Mr Miliband will address the TUC in Bournemouth next week - the biggest group of union activists he will have faced since announcing the reforms.