British opposition leader Ed Miliband said Tuesday he was "absolutely determined" to reform the Labour party's historic financial links with trade unions, as he addressed delegates in a key speech.

The unions helped found the centre-left party in 1900 and provide the majority of its funding, but Miliband has vowed to end the process by which union members automatically pay affiliation fees to Labour unless they opt out.

Union leaders have warned the reforms could cost Labour millions of pounds a year -- and the 600,000-strong GMB union has already announced it will slash its payments to Labour from ??1.2 million ($1.9 million, 1.4 million euros) to ??150,000 next year.

Miliband admitted that his proposed changes -- which would require union members to individually opt in to Labour affiliation -- represented a "massive challenge".

But he said sticking with the current system was a "bigger risk" and he urged them to have the courage to change with just 18 months to go to the next general election.

"Some people ask: what's wrong with the current system?" Miliband told Trades Union Congress (TUC) delegates in Bournemouth on England's south coast.

"Let me tell them: we have three 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'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."

The proposed changes follow a row over efforts by Britain's biggest union, Unite, to get its favoured candidate chosen to contest an upcoming parliamentary by-election in Scotland.

Miliband is particularly sensitive to criticism about union influence after their support helped him beat his older brother, former foreign minister David Miliband, to the Labour leadership in 2010.

He said the changes could boost party membership from 200,000 to 500,000 or more and make Labour a party "rooted in every community in the country" and "a genuine living, breathing movement."

"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," Miliband added.

"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."

The Labour leader, who received polite applause at the end of his speech, said: "We must change. And I am absolutely determined this change will happen."

Labour currently nets a reported ??8 million (nine million euros, $12 million) a year from almost three million union workers.

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