Labour leader Ed Miliband says Labour could gain hundreds of thousands of new members from changes to its links with the trade unions.
The Labour leader told the TUC Congress he was “absolutely determined” to end the automatic affiliation of union members to the party.
Trade unionists will have to opt in to Labour affiliation as individuals after the reforms – a move which could cost Labour millions of pounds a year in affiliation fees.
But Mr Miliband said continuing with the current system is a “bigger risk” following the Falkirk scandal, in which Unite was accused of signing up its members to the local Labour branch without their knowledge in an effort to get the union’s preferred candidate selected.
An internal review cleared the union of wrongdoing, but Mr Miliband said it was time to review the relationship between Labour and its union backers.
A special conference will be held next March to approve the reforms, but there have already been financial repercussions for Labour.
The GMB has said it will reduce the number of affiliate members, leading to a cut of around £1.1 million in the party finances from January. Unison will also cut its funding from next year.
Mr Miliband said: “Some people ask: ‘What’s wrong with the current system?’ Let me tell them: we have 3 million working men and women affiliated to our party. But the vast majority play no role in our party. They are affiliated in name only.
“That wasn’t the vision of the founders of our party. I don’t think it’s your vision either. And it’s certainly not my vision.
“That’s why I want to make each and every affiliated trade union member a real part of their local party.
“Making a real choice to be a part of our party. So they can have a real voice in it.
“And why is that such an exciting idea? Because it means we could become a Labour Party not of 200,000 people, but 500,000 or many more. A party rooted in every kind of workplace in the country. A party rooted in every community in the country. A genuine living, breathing movement.
“Of course, it is a massive challenge. It will be a massive challenge for the Labour Party to reach out to your members in a way that we have not done for many years and persuade them to be part of what we do.
“And like anything, that is hard, it is a risk. But the bigger risk is just saying let’s do it as we have always done it.”
Mr Miliband, who received polite applause at the end of his speech, added: “We must change. And I am absolutely determined this change will happen.
“It is the only way we can build a one nation party. So we can build a one nation country. And most importantly a one nation economy, one that works for all working people, not just a few at the top.”