A ballot to elect a new joint-leader of the Amicus trade union descended into chaos yesterday after Sir Ken Jackson, a key Blairite loyalist, was beaten by former Communist, Derek Simpson.

After four recounts, Simpson was declared the winner by 406 votes, but Sir Ken refused to accept the result - prompting acrimony among the union's executive members as a decision was postponed until the defeated candidate's complaint had been heard.

Simpson threatened legal action, and added: "Ken Jackson is history. He is really making an idiot out of himself."

While business leaders expressed concern about the prospect of increasing union militancy, Tony Blair last night summoned union leaders to Downing Street for talks on their growing rift with Labour.

The meeting - which included Bill Morris of the TGWU, Dave Prentis of Unison and John Edmonds of the GMB - was described as "private" by Downing Street.

The Times reports that Number 10 was "stunned" by Sir Ken's defeat, and says that after a series of union moves to cut Labour funding, the party is facing a financial crisis.

Reflecting on recent events, the Sun says it is now time to "free our major political parties" by giving them state cash. "We must free Labour from its union shackles," says the paper. "And we want to see Iain Duncan Smith freed from accusations that he is in the debt of big business."

The estimated £50 million cost would be a small price to pay, argues the paper, for corruption-free politics.