Trade unions are set to launch an inquiry into the future of political funding and their links with the Labour Party.

The move is designed to strike back at modernisers who have talked of severing the link with Labour.

John Edmonds, general secretary of the GMB, said: "Trade unions are prepared to sit down and undertake a thorough examination of how we can take the link between unions and the Labour Party forward. That means we should look at a cap on individual donations and lower limits on spending."

In a letter to the Guardian, Labour backbencher Paul Daisley backs a review of the relationship between ministers and union officials. "The party's opponents have gained too much ground within the labour movement," warns the Brent East MP.