The pair also disagreed over Labour’s chances of winning an election at the event, hosted by Sky News’ Sophy Ridge.
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The Gateshead audience was strongly pro-Corbyn, at times booing Mr Smith and cheering Mr Corbyn loudly, particularly when he said: “Owen, we’ve recruited 300,000 people to the party”.
And the question of what happens after that defeat persists: today newly-appointed Labour mayoral candidate for the Liverpool City Region and Corbyn ally Steve Rotheram said that MPs “should reflect what the membership who select them are putting them into parliament to do”.
Mr Watson said in the letter: “I have no doubt that many Momentum members are genuine in their desire to campaign vigorously against Tory inequality”.
But Mr Miliband, who led the party before Mr Corbyn, said Mr Smith is the best candidate to make the crisis following the European Union referendum “a progressive moment”.
Mr Miliband said the new prime minister, Theresa May, had adopted the “language of the left” but could pull Britain to the right.
The result will be announced at a Conference on September 23 in Liverpool.
Mr Corbyn’s allies urged the party not to appeal against the ruling, stating that members’ money should not be used to try to stop them from voting.
The rivals faced off at the Hilton NewcastleGateshead on Thursday as they battled it out for the Labour Party’s top job.
Last month Mr Watson told Mr Corbyn he should stand down after 172 MPs backed a no-confidence motion in the leader.
“We regret that Tom Watson also forced through the decision yesterday at Labour’s NEC meeting to challenge the court judgement to restore the right to vote in the leadership election”.
Mr Coleman, who is working as an advisor to Mr Smith and previously helped deliver the Olympics for Boris Johnson, said Mr Corbyn’s challenger was better placed to deliver the economic policies proposed by Shadow Chancellor John McDonnell.
Several local party branches are holding votes over the next few days, with Plymouth’s Sutton and Devonport CLP holding a meeting on Friday evening.
Claiming that was not true, Mr Smith hit back: “We have to be honest with ourselves, comrades, we lost 18 seats in the council election, Cameron made 300 gains”.
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Since the leadership race began, Smith has laid out proposals that largely just echo Corbyn’s, and he has adopted language and slogans that appear to originate directly from Corbyn’s front bench. Whoever emerges as their new leader will want to act quickly to make inroads into this Conservative poll lead and address concerns about the party’s future.
