Britain's Labour Party Readies For Potential Leadership Battle

LONDON, July 4 (Reuters) - Britain's opposition leader Jeremy Corbyn will face a leadership contest unless he considers his position, Labour Party lawmaker Angela Eagle said on Monday, saying she has the necessary support to trigger a challenge and is ready to do so.

Corbyn has refused to resign following Britain's vote to leave the European Union, despite mass defections from his policy team and a no confidence motion that was passed by an overwhelming majority of lawmakers in his own party.

The party's deputy leader Tom Watson told Labour lawmakers on Monday he would meet with trade union representatives, Labour's financial backers, in a "last throw of the dice" to try and reach a deal over Corbyn's leadership, his spokesman said.

Discontent with the veteran socialist has been simmering for months among Labour lawmakers, but the crisis has come to a head since the Brexit vote, which has turned domestic politics on its head and raised the possibility of an early general election.

Critics accused Corbyn of leading a half-hearted campaign in favor of staying in the EU.

"I have the support to run and resolve this impasse and I will do so if Jeremy doesn't take action soon," said Eagle, who stood down as the party's spokeswoman on business issues after the EU vote and is the leading contender to launch a challenge.

"It's a week since Jeremy lost that vote of no confidence, and there are many other people up and down the country wanting him to consider his position."

In response, Corbyn urged the party to reunite and restated his determination to carry on as leader.

"When we do things together, we are very strong. Now is the time to come together," he said in a video posted on Twitter.

"I have a huge responsibility. I'm carrying out that responsibility and I'm carrying on with that responsibility."

Corbyn says he retains the support of the party's grassroots members, who elect the leader, and that resigning would be a betrayal of those who overwhelmingly voted him into the job last September.

A spokesman for Watson said the deputy leader had met with Corbyn on Monday and told him he could not continue as leader without the support of his lawmakers. Watson is due to meet trade union leaders on Tuesday.

"While there is a chance of some sort of deal they have to try and pursue that," his spokesman told reporters after a regular meeting of Labour lawmakers in parliament.

"He is acutely aware the window is closing very rapidly on that so he has asked his colleagues to give him some time to try and see if a deal can be done."

The outcome of the tussle for control of Labour, between Corbyn's left-wing supporters and more centrist elements, will define the party's voice in the negotiations that will shape future ties between Britain and the EU.

To trigger a leadership election, a rival candidate needs the support of 51 or more elected lawmakers. Corbyn has said he will stand again in any contest to replace him.