Keir Starmer was battling to restore authority over the Labour party last night after a bruising defeat at the hands of unions and the left sparked a storm of criticism over his performance as leader.

Ahead of a conference billed as the moment when Starmer would introduce himself as a future prime minister to the British people, the Labour leader was forced to withdraw plans to limit the role of party members, and increase that of MPs, in selecting future party leaders, after the unions united in opposition to block the move.

As the humiliating retreat was announced, allies of his deputy, Angela Rayner, made clear her fury at the way Starmer and his office had allowed what she regarded as an unnecessary row to dominate the first day of conference and overshadow a set of major economic policies she was announcing in her opening speech.

At a meeting of the national executive committee yesterday morning, Rayner proposed amendments to the Starmer plans in a desperate attempt to find a way forward. “She did not agree with Starmer’s plans and was trying to find ways to stop them wrecking conference,” said an ally.

Rayner used a Times interview yesterday to say that she would be prepared to run for the party leadership in future: “If I felt that it was the right thing to do for the party and the right thing for the country, then I would step up and do it.”

Starmer loyalists were trying last night to talk up the leader’s success in forcing through other reforms that would make it more difficult for hard-left activists to deselect Labour MPs. “He has locked out the hard left. This is a major achievement,” said one frontbencher.

But there was widespread dismay in all wings of the party over the way Labour had been plunged into more divisive internal arguments just at the point when it had hoped to train its guns on the Tories and present its leader as a future occupant of No 10.

In an excoriating article in today’s Observer, the former shadow chancellor John McDonnell says he can no longer play the loyal elder statesman.

He says Starmer “has abandoned the platform on which he was elected Labour leader, sidelined much of the broad team that got him elected and has reached for the Blairite playbook and resuscitated Blair’s old crew, of Peter Mandelson as his consigliere, combined with an appetite for factional purges that makes the Kinnock era look tame. The result is that we are witnessing something akin to the performance of a Blairite tribute band with the same old stunts and strategies being rolled out on schedule but with a great deal more venom.”

Starmer and the shadow cabinet are still hopeful they can rescue the conference with a series of major announcements on job security, green policies and education, among others, in the coming days. The Labour leader is also determined to turn up the volume of criticism of the Tories over lorry driver and fuel shortages as well as the looming cost-of-living crisis.

Starmer told the Observer he was demanding emergency visas for haulage drivers’ to get supplies up and running fast. “Labour also demands cancelling the cut to universal credit and scrapping the tax hike on national insurance. Both make a bad situation much worse for working people.

“Finally, let’s end short-term panic with a plan to address labour shortages by boosting working conditions and British industry so we buy, make and sell more in this country, building a stronger future together.”

Ed Miliband will today push ahead with ambitious Biden-style plans for investment in greener industry, including the steel industry, under the “green new deal”. Miliband said it is no time to be cautious. “We have to go big on green because it is the only route to delivering economic and climate justice together, and it is the only way to tackle the greatest threat to humanity,” said the former party leader and shadow business minister.

But anger at Starmer’s misjudgment over the leadership rule changes has seriously dented morale, even among shadow ministers who see themselves as scrupulously loyal. “This is a total disaster,” one member of the frontbench said last night.

Under Starmer’s original proposal to change the rules on electing leaders, the one-member, one-vote system would have been replaced with a return to the electoral college made up of the unions and affiliate organisations, MPs and party members – each with an equal share. Even party moderates said the plan – designed to make it more difficult for the leftwing membership to elect a leader such as Jeremy Corbyn – was a difficult sell as it appeared to send a message that the party did not trust its members.

Delegates were due last night to vote on a revised package under which candidates for leadership elections would have to have the support of 20% of MPs, up from the current 10%.

Other conference flashpoints for the leader could include rows over Labour’s position on trans rights and changes mandated by the Equality and Human Rights Commission after its investigation into antisemitism.

Starmer also faced criticism last night from his predecessor. Speaking at a Young Labour rally, Corbyn suggested the left could organise against Starmer: “The electoral college plan may have been defeated for now but we have seen the leadership’s true colours.

“If we want the Labour party to be a vehicle to win elections to confront the climate emergency and redistribute wealth and power to the many from the few, then we need to come together and get organised.

“There is another way forward, for the Labour party and Britain, that is based in peace and justice, in the policies the majority of people actually want, not what the establishment and its media mouthpieces insist they should want. If our leadership won’t champion that path, our movement must and will.”