Labour will lose the next general election if it backs the “status quo” on immigration and free movement of labour, the party’s deputy leader has said.

Tom Watson accepted that the party was not united on the issue and said it was still formulating its policy because “we don’t know what is going to come out of the Brexit settlement”.

Mr Watson said the party’s starting point was that Theresa May would take the UK out of the EU’s free movement treaty

“I think for the Labour party what we can’t say is the status quo,” he told Sky News’s Sophie Ridge on Sunday programme.

He added: “I want [Theresa May] to be able to say this country will have control over its own borders, that we’ll be able to count the number of people in and count the number of people out, and make sure that a convincing, fair solution to people’s genuine concerns about immigration is addressed.

“That is one of the challenges that Labour will have in its manifesto, whenever that election comes. If we don’t address that issue then Labour won’t win that election, I’m very clear about that.”

Shadow Home Secretary Diane Abbott, a longstanding ally of Jeremy Corbyn, is understood to be supportive of the continuation of free movement, while other MPs have called for controls to be implemented.

Clive Lewis, the shadow Business Secretary who is seen as another ally of Mr Corbyn, has called for immigration to be tied to trade union membership.

Today Labour MPs including Stephen Kinnock, Jon Cruddas, and Emma Reynolds called for a new two-tier system of immigration controls that would separate skilled workers from unskilled workers.

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Writing in the Observer the MPs warned that “mixed messages” on immigration from Labour were proving “deeply corrosive” to voters’ trust of the party.

Theresa May has said she will prioritise ending free movement of labour with the EU in Brexit negotiations, and that she will only secure the best access to the single market after doing so.