Andy Burnham said it is hard to accept that changes meant he missed out on the Labour leadership

The increasingly bitter battle for the Labour leadership saw both camps trade insults as they questioned each other's loyalty to the party.

Shadow chancellor John McDonnell accused leadership challenger Owen Smith of "talking up" threats of a split to scare members into voting for him.

And Mr Smith's side hit back by querying the shadow chancellor's commitment to Labour.

Mr McDonnell, who is running Jeremy Corbyn's campaign to retain Labour's top job, accused Mr Smith of becoming the "disunity candidate".

He said Mr Smith was "flip-flopping" in the wake of reports some MPs intended to trigger a semi-split in the party if he fails to win.

"If he continues to refuse to denounce those calling for a split, then members will think he is simply trying to scaremonger them to vote for him by his talking up of threats from a minority of MPs supporting his campaign who are plotting to split our party in Tory newspapers, while at the same time refusing to denounce them.

"And it'll be hard for anyone to tell how much Owen truly is opposed to a split, and how much he is giving tacit support to those plotters in a hope it helps his campaign.

"Owen Smith therefore needs to immediately distance himself from those people saying they want a split, which is causing huge damage to our party at this time.

"Anything short of this will make him the 'disunity candidate'," said Mr McDonnell.

Mr Smith's campaign chief Kate Green returned fire by reminding the shadow chancellor of Mr Corbyn's pledge not to launch personal attacks.

"The irony of John McDonnell offering hollow words on party unity will not be lost on Labour members and supporters.

"Since the devastating referendum result, Owen has worked tirelessly to unite the party, negotiating with Jeremy, with trade unions, and with people across the Labour movement in an effort to bring all parts of the party together.

"While John, who previously referred to the Labour Party as just a 'tactic', has remained relaxed about the prospect of the party splitting.

"John should reflect on Jeremy's commitment not to descend into personal attacks and innuendo," said Ms Green.

Ms Green also wrote to the chair of the Corbyn-supporting Momentum group accusing the Labour leader of refusing to take part in a Channel Four debate.

She also sought assurances he would engage in such events before the result of the contest is announced on September 24.

Meanwhile, Mr Corbyn has called for business reform after the collapse of BHS.

The Labour leader told The Observer he wants it to be mandatory for employers with more than 250 staff to bargain collectively with unions.

Mr Corbyn also criticised the former owner of BHS Sir Philip Green, saying he had "asset-stripped the company" and "left the Government to pick up the pieces".

And Mr Smith demanded reform of the honours system following reports of who would be included on David Cameron's resignation list.

Mr Smith's campaign received a boost as two ex-economic advisers to Mr Corbyn said they did not believe he could lead the party to victory at the next election.

Former member of the Bank of England's monetary policy committee, David Blanchflower, and Simon Wren-Lewis, a professor at Oxford University, have expressed concern about Mr Corbyn's leadership, The Guardian reported.