Defiant Blair warns off his Labour critics

TONY BLAIR will come under attack from some of his normally loyal allies at the Labour Party conference, which opens in Bournemouth tomorrow.

Amid growing concern in the party about the Government's performance, Blairite modernisers will join the ranks of his traditional left-wing critics by demanding more radical action to tackle poverty and attacking his plans for further internal party reforms.

There will be strong demands at the conference for the estimated pounds 10bn "war chest" at Gordon Brown's disposal to be spent on improving public services and old age pensions. Critics will oppose further tax cuts before the general election.

But Mr Blair will defy them in his keynote conference speech on Tuesday by giving his party a tough message on the need for economic prudence. He plans to say: "This Labour Government has achieved something no previous one has secured; we are now the party of economic competence. Nothing - but nothing - must be done to place this huge political prize at risk."

The Prime Minister will lavish praise on the Chancellor's running of the economy and try to head off attempts by cabinet ministers for the "war chest" to finance higher spending on education, health and transport.

But Mr Blair is expected to admit his government has a "mountain to climb" in its efforts to create a "New Britain". Aides expect him to avoid "self- congratulation" and to adopt a "self-effacing but ambitious" approach to the tasks ahead. The aim is to combat a growing feeling among voters that the Government is becoming arrogant, as revealed in Labour's private opinion polls leaked to The Independent. "It is not a big problem but it is flickering on the radar screen, so we will deal with it," said one Labour official.

The party leadership will be alarmed by the first stirrings of discontent among modernisers who believe the Government is being too cautious.

A group called Labour Renewal Network, which supports the "Blair project," will be set up in Bournemouth to demand more radical policies. Its organisers fear Labour will miss the huge opportunity afforded by its massive Commons majority to secure lasting change in Britain. One said: "The Government has done lots of good things but it is not ambitious enough. We don't want Tony Blair to go down in history as another Harold Wilson."

It will argue that the party's 1997 election promise not to raise income tax rates was "a tactic, not a principle". It fears that Labour will be sucked into a Dutch auction with the Tories as both parties pledge to cut taxes, reducing the amount of money for tackling poverty.

Matthew Taylor, director of the Institute for Public Policy Research and the party's former policy head, who will speak at the new group's fringe meeting, said: "I support any attempt to create a space which is more radical than New Labour and a couple of steps ahead of it, but which is positive and not oppositionist."

Mr Blair also faces a battle over his plans to push through the final stage of his reforms to Labour by abolishing the general committees of constituency parties. Trade unions fear this will curb their influence in the party and that Mr Blair's proposals could backfire by allowing left-wingers to "pack" all-member meetings.

Sir Ken Jackson, one of Mr Blair's closest allies in the union movement, attacked the reforms last night and he is furious the unions have not been consulted. "We would not support any weakening of trade union input at local party level," he said. "There is nothing the hard left likes more than the abolition of representative bodies."

Other unions will flex their muscles in Bournemouth by criticising the Government's plans to commercialise the Post Office and partly privatise Britain's air traffic control services.

t Frank Field, the former social security minister, criticised Mr Blair's crusade on welfare reform in an article in Reader's Digest. "On most of the big issues, we have funked it," he said.

Donald Macintyre, page 10;

SNP jubilant, page 11; Leading article, Review, page 3