LIVERPOOL, England—The U.K.’s main opposition Labour Party opened the door on Tuesday to a second referendum that could reverse Brexit if talks with the European Union collapse.
Labour members ratified a proposal for Labour to consider a second referendum if talks with the EU fail—or if the British Parliament rejects the settlement Prime Minister Theresa May negotiates with the EU.
Labour’s Brexit spokesman, Keir Starmer, told a cheering crowd at the party conference in Liverpool on Tuesday that Labour would likely vote against the Brexit deal Mrs. May is trying to hash out with the EU.
Mr. Starmer said if there is no subsequent general election following a defeat in a vote over the deal, the Labour proposal would pave the way for the party to campaign for a second referendum on the Brexit terms.
He said “options must include campaigning for a public vote and nobody is ruling out remain as an option.”
Tuesday’s motion doesn’t commit Labour to any course of action but is the latest move that would allow it to exploit turmoil around the expected vote in Parliament on the Brexit deal.
The motion was pushed to the conference floor by activists wanting to commit the party to a second referendum. Instead, they got to vote on a compromise proposal hashed out earlier in closed-door party meetings that permits the party to consider calling for a referendum.
Labour and its left-wing leader, Jeremy Corbyn, have been ambivalent over Brexit. Many of the party’s traditional blue-collar supporters voted to leave the EU, but a majority of its new group of young members supports staying inside the bloc.
With six months to go until the U.K. is set to quit the EU, investors worry that Britain’s divided political system could see Britain stumbling out of the trading bloc without an exit deal, a situation that could create economic chaos, some analysts say.
The ruling Conservative Party doesn’t have a working majority in Parliament that would guarantee lawmakers accept the deal she negotiates. Mrs. May’s challenge is greater because some of her party’s lawmakers may oppose any deal she brings home, forcing the government to rely on Labour to back her proposals.
Even if Labour were to push for another referendum, it isn’t clear whether the party would seek to allow voters to reverse Brexit: Some Labour members have supported a choice between Mrs. May’s negotiated deal and a no-deal Brexit.
Mr. Corbyn has repeatedly said he respected the results of the initial referendum vote to leave the EU, a stance at odds with Mr. Starmer’s pledge to allow voters the choice to remain in the EU.
Several Labour MPs who support leaving the EU said they weren’t worried by Mr. Starmer’s declarations.
Graham Stringer, a Labour lawmaker who supports Brexit, said Tuesday’s nod to second vote was a “classic Labour fudge that has killed off the campaign” to reverse Brexit. Labour isn’t explicitly saying it would back a second referendum, so the idea can be ignored, he said.
Mr. Starmer told Labour supporters that all options would be explored “if we need to break an impasse.”
Write to Max Colchester at max.colchester@wsj.com
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