Up until the 1980s Labour was controlled from the centre or the right of the party. The balance was usually in favour of the combination of the Parliamentary Labour Party (PLP) and the trade union leadership. The Constituency Labour Parties (CLP) leant more to left as they were run by local activists.
This balancing act did run into trouble under Wilson when two of the major unions, the transport workers and the engineering union, did swing to the left. Even here though the unions were more interested in pay and conditions than forcing the whole party to left. Hugh Scanlon of engineers was not especially political although along with Jack Jones of transport workers he was an ex-Communist Party member.
The campaign for more democracy inside the party was not started by the right and New Labour. It had been going for a long time initiated by the left to make the party more responsive to the activists in the CLP. Nye Bevin had relied on the constituency parties as his power base. It reached its peak in the 80s as the local parties tried to bring in rules allowing them to re-select their local MPs. Although often blamed, it wasn't the unions who would have been responsible for a left swing by the party if it had been successful, it would have been a new left leaning PLP teaming up with the CLP.
This was a slow moving process. At the beginning we saw the 'Gang of Four' leave the party to form a new social democrat party. It could well have succeeded as there was a move to left by many inside and outside the party against Thatcherism. The problem was that there was such a good target for the right and centre of the party to aim at in the Militant Tendency.
The Militant Tendency was practicing a strategy used by other Leninist groups of 'entryism'. This where the revolutionary group takes control of an existing, usually reformist, party. Before the war the communist party tried it at one time and after the war various Troskyist parties also used it. Gerry Healy had taken control of the party's youth wing, the Young Socialists, until they were expelled. For the non-revolutionary left the Militant Tendency supplied the bodies needed to gain control of the local parties. I guess Tony Benn and others must have thought they could control them after they had power.
In part 3 we can look at why the reaction of the MPs of PLP to the CLP campaign for democracy gave us what we have today.