Labour MPs Margaret Hodge and Ann Coffey led the uprising by drafting a letter expressing no confidence in the leader.
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She submitted her motion to Parliamentary Labour Party (PLP) chairman John Cryer with a request that it should be discussed at the next meeting of the group on Monday, with a vote the following day.
Corbyn, a long-time Eurosceptic, defended his conduct in the campaign amid criticisms that he offered no more than lukewarm support for remain, blaming government austerity cuts for alienating voters.
More than 70,000 people have signed a vote of confidence in Jeremy Corbyn within hours of the form appearing online as he faces a leadership revolt from Labour MPs.
“Jeremy Corbyn should consider his position”.
But if a substantial number of MPs back it, pressure on the leader could become unsustainable.
“I think recognising the divisions and the genuine concerns of people who are voting out because they are in envy about the lack of economic opportunities, feeling anxious about immigration, those sorts of concerns, that I think the Government has not listened to and not responded to and all parties need to respond to as well”.
She said: “I saw the slow rebuilding of the Labour Party through the 1980s with the efforts of Neil Kinnock – he built it into a force that then was electable in 1997 with Tony Blair as the leader and that was very hard”.
A spokesman for Mr Corbyn labelled Dame Margaret’s move as “a bit of a self-indulgent act”.
Voters in areas that have traditionally voted Labour, including those in Sunderland, South Tyneside and Swansea, swung heavily behind Brexit.
Without naming Mr Corbyn, she said: “It is now incumbent to all party leaders to also reflect to what extent they are representing and reflecting the views of the voters”.
Labour is anxious Mr Corbyn would not be able to beat the Tories after Leave swept to big wins in the party’s heartlands in the north of England and Wales.
“We have to recognise that we had clear objectives, as the labour In campaign for the United Kingdom to remain and we failed in those objectives.”I think the Labour leadership has to take responsibility for that and there has to be some accountability for that.
If we had campaigned better, we could have got another half a million votes for Remain”.
During a visit to a Widnes factory today, the Labour leader said: “Young people only voted by 50% in the last General Election”.
Corbyn, who has never commanded majority support among Labour MPs, is under fire for failing to persuade Labour voters to back the “Remain” campaign, The Independent reported.
“I think the European referendum was a test of leadership and Jeremy failed that test”, Hodge told Sky News.
Commentators say the campaign to keep Britain in the European Union gained momentum after the murder of Labour MP Jo Cox, a strong supporter of Britain staying in the bloc.
He actually said to guests: “I might go and punch him because he’s a tosspot and he left the party in the state it’s in”.
Its managing director Dean Drinkwater said the company, which has a turnover of £20m, said much of their products are exported to the European Union and they rely on skilled labour to make up the shortfall, although they are training up local apprentices too.
“I would be very surprised if it ends up with the exit of Jeremy Corbyn”, he said.
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The Labour leader cancelled a speaking engagement at Glastonbury following the referendum result.
