Mandelson urges unions to end Progress row
Lord Mandelson has warned trade unions attempting to expel a New Labour pressure group from the party they risk reopening the divisions of the 1980s.
The GMB union claims Progress - founded by Lord Mandelson - is a "party within a party" like the Militant Tendency.
Other unions are reportedly in favour of banning the group, in what one called a "battle for Labour's soul".
Lord Mandelson said the unions should get their own house in order and stop trying to create divisions.
He told the BBC Andrew Marr show: "We don't want to have a political party of intolerance, of renewed divisiveness, of falling out and rancour, of the sort that we saw in the 1980s.
"I think all of us want to put that behind us."
'Not a Blairite faction'
The GMB claims Progress is attempting to push Labour into "accepting the Tory arguments for public spending cuts" and it will submit a resolution to the party's annual conference in September to try to "outlaw" the group.
According to The Guardian , the attack on Progress involves several unions, with internal documents from Unite - one of the party's biggest financial backers - describing it as part of a "struggle for Labour's soul".
The GMB has also accused Progress members of briefing against Labour leader Ed Miliband and trying to undermine Ken Livingstone's campaign for London mayor - both charges it firmly denies.
Lord Mandelson insisted it was not right to "to view Progress as some sort of Blairite faction".
He told the BBC's Andrew Marr show: "It doesn't want to recreate the New Labour model of the past.
"It's forward-looking, it's progressive, it's modernising and it wants to commit to the best possible platform on which we can fight and win the next election.
"Perhaps that's why the trade unions don't like it."
Ed Miliband - who last month addressed Progress's annual conference - had "heaped praise" on the group, added the former business secretary.
Lord Mandelson said the unions should be focusing on "how they remake themselves for the 21st century".
"If they became, in a sense, more representative of their members as a whole they would not be leading either themselves or the Labour Party down what I regard as a pretty blind alley."
The Labour Party has said it will consider the GMB motion but stressed that it was "a broad church" and "not in the business of excluding people".
It comes as Ed Miliband's new policy chief, Jon Cruddas, sets out his vision for the party's future in an interview with the Observer.
Mr Cruddas says Labour should be about "rebuilding Britain" and backing the public sector - and warns the party to end "gang wars" between Blairites and other factions, telling the newspaper: "We are beyond that. We have to be".