Donor hints at support for Kendall
Liz Kendall's Labour leadership campaign could receive a significant financial boost after a major donor suggested she appeared the most likely to take the party in the right direction.
JML founder John Mills, who gave £1.6 million of shares to the party last year and is considering whether to help fund a candidate in the race to succeed Ed Miliband, said he is yet to choose who to back.
But he made clear the shadow health minister is the only one to have shown a determination so far to pursue a pro-business Blairite agenda rather than retreat into Labour's "comfort zone".
Mr Mills, who was critical of elements of Mr Miliband's "core vote" tactics before the election, said history shows picking a leader from the new generation is the best way to recover from crushing defeats.
"In terms of who I would support I am very interested to hear what all of them have got to say. It is early days," he said.
Shadow health secretary Andy Burnham and shadow home secretary Yvette Cooper - cabinet ministers in the last Labour administration - are the other front-runners, with shadow international development secretary Mary Creagh also standing.
"They are obviously setting out rather different stalls, with Liz Kendall much more orientated towards a kind of Blair heritage whereas the other ones are perhaps more in Labour's more traditional comfort zone," Mr Mills said.
"But the election is going to go on for a long period of time. They will have to define their positions more clearly on a number of issues and I am rather open-minded on who to support."
He said: "Labour also needs to appeal more to the business community and Middle England. That is very much the formula that New Labour had which was very successful. Labour has to go that way.
"I know that the Labour Party is always a bit inclined to retreat back into its comfort zone but the last election, if it showed nothing else, showed that that policy just simply isn't a viable way ahead if the Labour Party wants to get back into government."
Asked if that is pointing to Ms Kendall being the right candidate, he said: " Yes. I think in some respects it is. That's right."
He said he had been particularly struck by her "brave" move to say she would seek to stick to a Nato target of spending at least 2% of GDP on defence - something the Conservatives have declined to guarantee.
"There are all sorts of problems. The Government is trying to cut expenditure and all the rest of it. If you are going to spend 2% on defence what are you going spend less money on doing?
"Political life is full of choices. But I thought it was a very brave statement."
He sa id he was concerned about the influence of trade unions on the leadership contest and the direction of the party but warned against antagonising a key player in the movement.
"I think this cuts both ways. The Labour Party does depend very substantially on the unions financially but also for its core support. I don't think a policy of antagonising all the trade unions is going to do anything to get the Labour Party back into power.
"But there is obviously a balance that has to be struck between having the Labour Party too dependent on trade unions and casting on one side and having anti-trade union legislation which the Labour Party doesn't want to have."
During an interview on BBC2's Newsnight, Ms Creagh said she should be the party's new leader because she believed "economic competence, hope and compassion can go hand in hand".
"I want to rebuild the progressive coalition that won us three elections."
The leadership hopeful conceded she would not allow new free schools to be opened after being repeatedly pressed over whether she backed the Conservative policy.
"We were very clear at the last election that the free schools that already existed would be allowed to continue," she added.
Ms Creagh was asked if she had a "desire not to say too much" after appearing reluctant to directly answer whether she backed free trade.
"No, I'm in favour of free trade," she insisted.