2

This does not sound right.

As the war progressed, the federal government came under immense pressure to establish a national system of labour offices, prompted by concerns over the shortage of manpower for the warfare and, more importantly, the threat of the post-war social upheaval.

I am trying to convey this:

As the war progressed, the federal government came under immense pressure to establish a national system of labour offices. Such was prompted by:

  1. concerns over the shortage of manpower for the warfare.

  2. the threat of the post-war social upheaval (this was more important in creating the pressure).

I feel that "more importantly" is essential to the meaning and so I am not sure if I should set if of with a pair of commas starting right after "and". Apart from that, when I read the sentence and get to "...prompted by...", I forget everything that came before.

1

Your sentence sounds perfect to me.

If you're concerned about the length, it's appropriate for the subject matter. It's a complex but single thought. Breaking it into pieces, multiple sentences, would be awkward and confusing.

Your commas are in the correct places. The rule is that a comma represents a brief pause, e.g., for emphasis or an aside, when speaking.

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