McDonnell’s intervention highlights the bitter nature of the party’s leadership contest, which has already been marred by a series of court battles over the rules.
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In his summing up speech, Smith said “we can stick with Jeremy Corbyn”, but before he managed to finish his sentence the crowd erupted in whoops and cheers.
Mr Corbyn responded: “It’s an enormous honour to be selected and elected as a Labour member of Parliament”.
Scottish leader Kezia Dugdale’s name was even jeered at the heated head-to-head featuring the two men vying for the party’s United Kingdom leadership.
He recognised many Scottish Labour supporters who are hungry for change have shifted to the SNP, but insisted these people are not being well served by the nationalists.
“Let me make it clear”.
The hustings came hours after shadow Chancellor John McDonnell, a close ally of Mr Corbyn, accused his own party’s officials of a “rigged purge” against supporter of the current leadership.
He said: “I stand just as Scottish Labour did in May on an unashamedly anti-austerity platform with policies that will ensure that no-one across Scotland and the rest of the country is left behind”.
“There are many people who have voted for, or even joined, the SNP who want to see numerous changes we want to implement”. But the Pontypridd MP was forced to defend the Lothians MSP when her name was met with jeers as he praised the “brilliant job” she had done in Scotland.
He said the SNP Government had pursued a low tax agenda while the NHS and councils struggled under austerity, and Scotland lacked decent jobs and affordable housing.
Writing in The Herald newspaper on Thursday, Mr Smith said: “A key part of my plan would be a £200 billion British New Deal – a huge investment fund to renew our country, providing £20 billion through the Barnett formula for Scotland”.
“There is creativity in all of us but we need to give people the opportunities for this creativity to flourish”.
Virgin Trains has previously said it was “puzzled” by the suggestion that Mr Corbyn was unable to find unreserved seats when he boarded the train because CCTV images appeared to show “they’re right next to him”.
The backing of Jeremy Corbyn was agreed at a meeting earlier this month, with the TUC saying it believes he has reinvigorated the Labour Party with policies consistent with those of the trade union movement.
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Smith continued: “People in Scotland can not look to Labour in Westminster right now and anticipate us winning a general election, therefore we are ill serving the Scottish Labour party and we are ill serving the people of Scotland”.
