Moves to reach an agreement over controversial plans to change the way union members affiliate to the Labour Party have reached a "major stumbling block", sources have revealed.
Labour leader Ed Miliband wants to reform the historic link between the two wings of the movement, with a special conference planned on March 1 aimed at voting on the changes.
Lord Collins, a former Labour Party and union official, has been holding discussions with union officials for months in a bid to reach agreement.
One source close to the negotiations said talks had "effectively broken down".
Bu t a senior Labour source said it was "nonsense" to suggest the party was blocking reform.
"We want to see radical change in the way the party is structured. Nothing has been decided as Lord Collins has not even published his report," he said
Union officials thought an outline of a deal had been reached before Christmas, including the abolition of the electoral college used to elect Labour's leader.
Labour MPs make up a third of the college, with the other two-thirds split between unions and constituency parties.
Union leaders were not willing to change voting arrangements for Labour conferences, or for the party's national executive, but a formula which would see new union members, and eventually existing members, specify that they wanted to be affiliated to Labour, was believed to have been worked out.
Lord Collins is due to report to a meeting of Labour's executive on February 4, ahead of the special conference in London.
The GMB has already decided to drastically cut its funding of Labour in protest at the reforms, and other unions could follow suit if there is no agreement.
Asked about the likelihood of a deal, GMB general secretary Paul Kenny said: "There were discussions taking place, which have broken down."
Mr Kenny declined to comment further.
Mr Miliband wants individual union members to be given the choice of opting in to join Labour, rather than being automatically affiliated.
His proposed reforms followed controversy last year over the selection of a Labour candidate in Falkirk, where Unite was accused of signing up members in the constituency so it could influence the choice.
Unite always denied doing anything wrong.
A union source close to the talks between Labour and the unions, said: "A major stumbling block is the refusal by the Labour leadership to change the electoral college voting system to one member one vote.
"The leadership is protecting the undemocratic position of MPs in that voting system."
Labour promised a "major consultation exercise" ahead of any final decision.
Labour MP Ian Lavery has described the planned reforms as the "biggest political gamble" in the history of the party, warning that Labour could lose millions of pounds from union affiliation fees.
A senior Labour source said later: "Ed (Miliband) has made clear he wants radical reform.
"Ray Collins has yet to publish his report and you get this sort of speculation emerging in public when detailed discussions are taking place in private.
"Ed has always been clear that the scale of his reforms mean there are likely to be consequences for other rules and structures in the Labour Party.
"He is proposing that we change the way we elect our leaders and discussions on party reform are continuing."
It is the first time the party has said publicly it is looking at ways of changing the way the leader is elected.