LIVERPOOL, England (Reuters) - On a cold autumn night, trade union activist Paula Barker made a passionate plea to fellow members of Britain’s Labour Party to be positive about leaving the European Union and make way for leader Jeremy Corbyn’s radical new agenda.

FILE PHOTO: Britain's Labour Party Leader Jeremy Corbyn sits on stage at the annual Labour Party Conference in Liverpool, Britain, September 23, 2018. REUTERS/Hannah McKay/File Photo

The response - a mixture of cheers and competing calls to “stop Brexit” - cut to the heart of the main opposition party’s struggle to find united ground to try to challenge the Conservative government’s strategy to leave the EU.

Split, like much of the country, over how to leave -- Britain’s biggest policy shift in more than 40 years -- Labour’s leadership is wary of making commitments to the growing number of members who are fighting Brexit because it fears it could lose voters optimistic about a future outside the bloc.

Barker’s words on the eve of the party’s annual conference in the northern port city of Liverpool echoed long after the meeting began, when Labour tried to keep both sides of its Brexit divide onside by keeping a possible second referendum on the table.

That may well win favor with well-heeled London-based members of the party, who overwhelmingly voted to stay in the bloc. But for those, especially outside the capital, who voted to leave in frustration at a system they say is stacked against them, Brexit offers opportunity.

“Labour needs to be a party of popular mobilization and radical change. We need to be very wary of being labeled as a middle-class pro-Remain or pro-EU party,” Barker shouted at hundreds of Labour supporters amassed on Liverpool’s pier head on Saturday evening to see Corbyn take the stage.

“It would be disastrous for Labour to say ‘No, we know best - you may have little or nothing to lose but stick with the status quo’ ... We should remember that a radical Labour government outside the EU and the single market would be better able to implement its radical economic program.”

It is an argument Labour’s leadership feels keenly, and one that almost certainly chimes with Corbyn, a veteran eurosceptic who in 1975 voted “No” to Britain’s membership of the then-European Community.

Corbyn has long been more interested in ending austerity in Britain and launching an economic program to reverse cuts he says have hurt the poor for the benefit of the “super rich”.

Outside the EU’s state aid rules, he could renationalize Britain’s mail, rail and utilities. Free of the bloc’s competition directives and procurement rules, Labour could protect and expand the public provision of public services.

Those goals are some of the ones that define Corbyn’s program, forcing Brexit down his list of priorities.

BREXIT ROWS

But Labour, like the governing Conservatives, cannot escape the debate over Brexit, especially after Prime Minister Theresa May’s plan to leave the EU was largely rejected by the bloc last week, making the outcome of the talks more uncertain than ever.

Brexit has so far largely dominated this year’s party conference, a meeting of Labour members who are increasingly confident that Corbyn will soon be leading a government.

And it could become again the trigger for a new row over Britain’s divorce from the EU, with a move by the leadership to accept a motion for a second referendum failing to close the divisions that have long dogged the Labour Party.

Late into the night on Sunday, local Labour Party figures, union officials and Brexit spokesman Keir Starmer debated for more than five hours what motion to put to the membership on Tuesday over the possibility of a second referendum.

The party said the meeting was “conducted in a cordial and respectful manner that recognized the complexities of Brexit” as agreement was sought on a motion that would instruct the leadership to first judge any deal by its six tests.

If voted down in parliament, Labour should then call for a new election, the motion says. If that does not succeed, then the party should keep all options on the table, including the possibility of a second referendum on a question yet to be determined.

Corbyn’s second-in-command, finance spokesman John McDonnell, was clear - the question should not involve a re-run of the 2016 referendum by including an option to remain in the EU.

For those pressing for a second referendum, or a People’s Vote, the motion was little more than a fudge.

“Dozens of motions were submitted to (conference), thousands have marched on the streets, and millions more have called for a People’s Vote,” Labour lawmaker David Lammy, who has a London constituency, said on Twitter.

“They did not do this to be offered a farcical referendum on No Deal or a Bad Deal. It absolutely must include the right to remain in the EU.”

It also did little to please those who campaigned to leave the bloc.

“The motion before the Labour conference doesn’t rule out a second referendum,” Brendan Chilton, general secretary of the Labour Leave campaign, told Reuters.

“There are 5 million Labour Leavers in the country who will look upon this motion with dismay.”

ELECTION FOOTING

With Tuesday the day for the vote on the second referendum motion, the Labour leadership will work hard to try to mute the squabbling - keen to push on with economic announcements they hope will tap into growing discontentment in Britain.

And it is a party which seems to have a renewed confidence after winning a greater vote share than expected in an election last year.

At two rallies so far, Corbyn has not even mentioned the word Brexit, sticking to his script that now is the time for change to break with what he calls the neo-liberal policies of the past to better benefit “the poorest and most vulnerable”.

“They are the ones who paid the price of the banking crisis of 2008. All the time the very richest in our society have had tax breaks, giveaways and tax havens,” he told a meeting staged by Momentum, a group set up to support Corbyn after he unexpectedly was appointed Labour leader in 2015.

“I tell you what - they are on borrowed time because a Labour government is coming,” he said to deafening cheers.