The Prime Minister claimed the Labour leader remained in the pockets of union bosses at Question Time.
But, Mr Miliband turned on the Conservatives millionaire backers and called for a cap on all political donations.
The GMB union's general secretary has criticised the language used by some within the Labour Party about trade unions, claiming it was "very disappointing and insulting".
Paul Kenny predicted just 10% of GMB members affiliated to the Labour Party would retain that status under the new system proposed by Ed Miliband.
Mr Kenny told BBC Radio 4's Today programme: "I anticipate we will now have to ballot our members so that we can comply with what Ed wants.
"I think we will be lucky if 10% of our current affiliation levels say yes they want to be members of the Labour Party, because they are two different things - campaigning for issues with the Labour Party and being members of the Labour Party are two entirely different things".
Mr Kenny added: "We have been trying to encourage our members to join the Labour Party for a very long time, in our magazines, in meetings, at our conferences. I have to say we have not been knocked down in the rush".
Lord Prescott has told Daybreak the Labour Party will not allow trade unions to "dictate policy".
The former deputy prime minister praised Labour leader Ed Miliband's plans to change the party's relationship with the unions.
Lord Prescott said, "We're not going to allow them to dictate policy. They can come to conferences and help decide our policy, but we're not having rich people do it".
Ed Miliband sought to redefine Labour's relationship with the trade unions that installed him as leader and help bankroll his party.
He also called on other parties to help him "clean up the way we finance our politics."
Mr Miliband's plans include replacing the automatic "affiliation fee" paid by union members to Labour with a voluntary one.
ITV News political editor Tom Bradby reports:
Paul Kenny, general secretary of trade union GMB, said Ed Miliband's decision to end automatic affiliation of union members with Labour would reduce funding "by a very significant but as yet unquantified amount".
The desire of Ed Miliband expressed today will most likely require GMB to ballot those members currently paying the political fund to see if they want any part of it to go to the Labour Party.
GMB is required to have a political fund and members understand this is so that the union can campaign collectively on the issues important to them like NHS, rights at work, housing, pensions and other political and economic priorities.
– Paul Kenny, general secretary of trade union GMB
The changes Mr Miliband seeks to made with regard to union affiliation fees will mean that none of the funds that would have gone in political affiliation fees will be available to fund Labour Party operations.
The GMB's central executive council will decide its policy on the issue in September.
Conservative Party chairman Grant Shapps has told ITV News that Ed Miliband's speech on plans to change the link between the trade union movement and the Labour party was "pretty desperate".
This whole business of opting members in as opposed to automatically enrolling them in the Labour party is a big change. It could cost Ed Miliband dear financially as estimates suggest it may cost Labour between £3-5 million.
To put it into context, it is reforms former Prime Minister Tony Blair wanted to do but couldn't and Mr Blair has been praising the current Labour leader for doing so today.
It allows this passive group of Labour members to allow unions to wield a lot of power. Yes, that is significant.
But as the Tory sources have been pointing out, perhaps with some justification, Miliband didn't really address what happened in Falkirk.
He didn't really say what he is going to do about it or other seats around the country where it is claimed Unite are involved. I think that part of it still needs to be addressed.
I'm sure Labour will conclude today that a big public row with the unions is no bad thing for voters.
Bob Crow, the general secretary of the transport union RMT, which is not affiliated to Labour, commented on Ed Miliband's plans to change the link between the trade union movement and the Labour party.
"When Tony Blair is wheeled out to underpin Ed Miliband's attack on the affiliated unions than you know that this is a panic move driven by the demands of big business and a right-wing media who would prefer that the working class have no voice at all," he said.
"RMT was expelled from the Labour Party almost a decade ago and in that time we have actually increased our political influence as we have had the freedom to back candidates and parties who demonstrate clear support for this trade union and its policies.
"With this latest assault by Labour on the unions, the time is right to start building an alternative political party that speaks for the working people and the working-class communities that find themselves under the most brutal attack from cuts and austerity in a generation."
Labour leader Ed Miliband has announced plans to abolish the system where individual trade unionists are automatically affiliated to the party and how candidates are selected.