Keir Starmer has brushed off a decision by Unite to cut funding to Labour and is set instead to turn to other unions, party members, donors and the general public to plug the gap.

The UK’s second biggest union voted to slash its party affiliation fees by just under 10% on Tuesday, a reduction that would mean a fall in income of around £150,000 on the £1.5m it donates in an average non-election year.

Despite wilder speculation that the move would result in a £750,000 annual cut, the union’s executive committee voted to cut by 50,000 its number of affiliates, with each affiliate paying £3.

Some 500,000 affiliates will now be helping fund Labour per year, rather than 550,000. The union gave a further £3m to the election campaign in 2019.

Starmer’s spokesman refused to deny that Unite’s decision could even help his drive to make Labour more electable because it would put distance between the leadership and general secretary Len McCluskey.

“Unite has taken their decision, we have seen Len’s remarks. We acknowledge that decision,” the spokesman said.

“Labour will continue to take decisions in the best interest of the country, that means tackling coronavirus, protecting people’s jobs and restoring public trust in Labour so we can win in 2024.”

Former cabinet minister Ben Bradshaw said that the move was welcome because McCluskey had kept the Tories in power for the last decade.

Asked if the decision would benefit Labour because it was a visible break with leftwinger McCluskey, the spokesman replied: ”Len has taken this decision, it’s for others to speculate and analyse that decision.”

“The party has a long history of raising money through its members, and through the trade unions and through individual supporters. We’ll continue doing that, we have a fundraising strategy in place.”

On the suggestion of public crowdfunding to raise cash, he added: “We will look at everything. Even before the Unite decision we were looking at how we can raise the funds to win in 2024. We are looking at various different models.”

Allies of Starmer pointed out that he had actually won a majority of Unite members’ votes in the leadership election earlier this year, when he easily beat its nominated candidate Rebecca Long-Bailey.

Meanwhile, HuffPost UK has learned that senior Unite figures dismayed by the funding cut have vowed that Jeremy Corbyn-backing group Momentum will not be benefiting from the money diverted away from Labour.

Sources said that the spare cash would go instead to groups like the Tribune magazine and “the energetic, intellectual left” rather than Momentum.

One member of the union’s executive committee had raised the grassroots group as a possible recipient in a debate about the kind of organisation that would get Unite support.

But it is unlikely that the committee would approve such a move because many Unite members were wary of Momentum not least because of its moves to cut trade union influence in Labour, insiders said.

“There is definitely no proposal to affiliate or donate to Momentum. It’s certainly not going to happen,” said a source. “Many Unite members are active in CLPs [constituency Labour parties] and have seen the chaos caused by Momentum internally,” another added.

Some within the United Left grouping of the union fear that the decision to cut affiliates weakens the union’s influence within the party and paves the way for other unions to edge it out.

The split within the union over the move to slash funding to Starmer was laid bare at the committee meeting on Tuesday, when it was approved narrowly by 25 votes to 23.

HuffPost UK understands that several weeks ago, there was pressure within the union to go even further and cut affiliate numbers by half – a move that would have led to the loss of £825,000 a year.

McCluskey told the BBC’s Newsnight that the deeper cuts could occur if the party veered away from Jeremy Corbyn’s agenda. “My activists will ask me, ‘Why are we giving so much money’?”

McCluskey, who is due to step down in 2022, expressed dismay that Unite funds had been spent by Labour paying damages to whistle-blowers who contributed to a Panorama programme about Labour’s handling of the anti-Semitism crisis.

But some Unite members are understood to be much more worried about the large sums spent on defending a libel case won by ex-Labour MP Anna Turley last year against the union and a leftwing blog Skwawkbox.

At a further meeting of the union executive on Wednesday, some members from its South East region asked who had authorised the spending on the legal case, which resulted in a £75,000 damages payout to Turley and in which the court costs have been speculated as being up to £2m. Costs have yet to be agreed.

McCluskey is understood to have said that as general secretary he had authority on behalf of the committee. He also warned members not to believe “right wing media” reports of the alleged multi-million pound costs.

Assistant general secretary Howard Beckett, a fierce critic of Starmer’s who backed the funding cut, told the meeting that the union had had several legal successes and justified defending the Turley case, sources said.

Euan Philipps, spokesperson for Labour Against Antisemitism, said: “If Len McCluskey, the general secretary of Unite, is threatening the further removal of financial support in order to dictate Labour Party policy then that should be welcomed by Labour leader Keir Starmer, not resisted.

“The issue of anti-Semitism in the Labour Party was a significant contributory factor to the party’s record defeat in last December’s general election. For the Labour Party to move forward it has to be courageous and ignore these manoeuvres by Mr McCluskey.”