A union is set to ignite a stoush within the Labor Party next week when it opposes party elder John Faulkner's key proposal for reform to stamp out corruption.

Australian Manufacturing Workers Union NSW secretary Tim Ayres has challenged Senator Faulkner's proposal to preselect upper house state and federal MPs through a ballot of all ALP members.

Mr Ayres, who is also a left-wing member of the ALP executive, supports the existing system in which the ALP conference preselects candidates.

The system has been criticised for the selection of former NSW upper house MPs Eddie Obeid and Ian Macdonald, who the Independent Commission Against Corruption has found corrupt.

The opposition to Senator Faulkner's proposal is likely to stir heated debate within the ALP's left wing on the floor of the ALP state conference on July 26 and 27.

Mr Ayres says the direct election proposal would disenfranchise union members and did not go far enough to reform party culture.

"I believe the Labor Party is strongest when the political wing and industrial wing are working together as a movement," he said.

"The case for changing Labor is overwhelming and urgent.

"There is absolutely a case for direct election for party leader, but one of the problems I see with John's proposal is that it doesn't even begin to touch the sides of the debate that we need to have.

"The bigger point is we need root and branch change, not just to rules and structure, but to culture and political organising and linking our party organisation to our purpose and party ideals."

John Graham, the left-wing NSW ALP assistant general secretary, said Mr Ayres had raised some "sensible views", but on balance, he would vote in support of Senator Faulkner's proposal for direct election of upper house members. Mr Graham said he was in favour of unions playing a role in community preselections of lower house electoral candidates.

Right-wing union and ALP rank and file members are almost unanimously opposed to direct election of upper house members and are expected to defeat the proposal.

Labor Party historian and former NSW minister Rodney Cavalier said left-wing unions could have pretended to support the Faulkner reform package, confident the rIght wing would defeat it.  

"I will not be surprised if the Faulkner proposals score fewer than 100 votes in a conference of 800-odd," he said.

"I am delighted that the left, so-called, unions will openly oppose. 

"There cannot be and will not be reform of the ALP until and unless legislation compels plebiscites on affiliation. Ninety-four per cent of Australians do not belong to affiliated unions."

UPDATE: The NSW ALP's Left will meet on Friday night and is expected to resolve it will not vote as a united block on the direct election proposal, but will split on the issue.