Last month, Labour Party fundraisers hit on a brilliant new idea. They would get one of their high-value donors to ‘underwrite’ a fundraising dinner. An amount was decided – £50,000 – a willing sponsor found. Then the trouble began.

“Ed Miliband intervened,” says a source. “It was going to be £100 a head, but he said it gave the wrong image. It had to be £20. So what happens?

“All the people who were happy to pay £100 for an exclusive evening said, ‘What do I want to go to a £20 dinner for?’ They pull out, and instead of selling 500 tickets, we’re lucky to scrape 100. Now the sponsor looks like getting stuck with a bill for fifty grand... The whole thing was an utter shambles.”

‘Shambles’ is a word that pops up a lot when discussing the organisation of the people’s party. One shadow cabinet insider disagrees, however.

“’Shambles’ gives the impression of a sense of purpose, of something happening,” they say. “It’s not even that good. There’s nothing there. We’re limp. Moribund.”

The person charged with stiffening Labour’s resolve and putting some life into this once-stout body is new general secretary Iain McNicol.

A former GMB trade union official, McNicol’s task is complicated by the fact that he beat Ed Miliband’s favoured candidate, Chris Lennie, to the role.

“Iain’s been trying to build a bond with Ed,” said one source, “but it’s hard going. Ed’s still very suspicious. He’s also quite thin-skinned, and Lennie’s defeat was a big embarrassment for him.”

Other insiders confirm early tensions, but say Miliband is warming to his new lieutenant. “I was at a fundraiser the other week, and Ed was gushing about McNicol,” said one. “It was a proper bromance.”

Chief among McNicol’s problems is the relationship between staff at the Labour Party’s Victoria Street HQ and the leader’s office. Or lack of one.

“We don’t like Ed and Ed doesn’t like us,” said one insider. “We hardly ever see him over here. The last time we did was when he wished us a happy summer recess.”

At the heart of this animosity lies Labour’s closely-fought leadership election.

Ed Miliband insiders believe Victoria Street staff were pulling for David Miliband during that campaign, and have not accepted defeat. Fears that have some foundation.

“David was over here a few weeks ago, being told about plans for the new move,” said one staffer. (Labour is relocating from its current office to Caxton Street.) “You could sense the warmth from everyone. He’s got it. Ed hasn’t.”

These divisions have at times reached farcical levels. “Look at the tuition fees announcement,” says one party source. “We didn’t know about it until it appeared in the papers on the Sunday of conference. Even Gareth Thomas didn’t know, and he was higher education spokesman.”

Ed Miliband has been attempting to improve liaison with the party machine, including weekly meetings between senior staff and two members of his team, Simon Alcock and James Barge. “The problem is these guys are just too junior,” admits one source. “It’s like, ‘who are you?’ Where are Ed’s senior people?”

According to some party insiders, they’re coming.

The key recommendation of a new structural review is to appoint an ‘A team’ of six executive directors to lead the party’s fundraising, communications and campaigning activity.

Some see this as an attempt by Miliband to exert his own control over head office.

“It’s obvious what he’s doing,” said one source. “He’s cleaning house.”

However, an NEC member says the new directors were a key element of McNicol’s selection pitch. “McNicol’s adamant we need fresh blood. He said to us, ‘We need to find the new Matthew Taylor and Dave Hill. Fast’.”

One Miliband ‘fixer’ is already in Victoria Street, and making his presence felt.

Tom Watson, scourge of the nation’s phone hackers, is setting up a new rapid rebuttal unit and ‘streamlining’ the party’s candidate selection processes.

“For the Feltham and Heston by-election we had 100 applications,” confides one insider. ”The deadline closed at five. By seven, people had already being told they weren’t on the list.”

But whatever the interplay between Miliband, McNicol and the Victoria Street foot soldiers, all are battling against two fundamentals: money and the Blairite legacy. “You can’t get away from these two factors,” says a shadow cabinet insider.

“The party machine is £2m short of paying its way over the next 12 months. And even if it could, people still haven’t answered a basic question: what’s it actually for? Under Blair, the power drifted away from the party and into Downing Street.

“We’re in opposition now but no one’s come up with a clear plan of how to transfer it back again.”

Labour needs that plan. And quickly.

Dan Hodges is a Labour commentator 

Tags: DAN HODGES, Ed Miliband, Iain McNicol, Issue 43, Labour Party, National Executive Committee