Prescott signals possible climbdown on air traffic

John Prescott was under fire on three fronts last night - over his plans partly to privatise Britain's air traffic control, his retreat on Railtrack's involvement in the London Underground and hints of a compromise on plans for 1.1 million new homes in south-east England.

John Prescott was under fire on three fronts last night - over his plans partly to privatise Britain's air traffic control, his retreat on Railtrack's involvement in the London Underground and hints of a compromise on plans for 1.1 million new homes in south-east England.

Downing Street acted quickly to throw its support behind the Deputy Prime Minister after claims that his rail, road and planning strategy lacked credibility. Tony Blair's official spokesman said: "The Prime Minister supports him totally."

After backing down on handing one-third of the Tube to Railtrack, and scaling back plans for house building in the South-east, the Transport Bill published yesterday signalled that the Government may be preparing a further climbdown over the formula for selling 45 per cent of the shares in National Air Traffic Service (Nats), with 6 per cent for the employees. Mr Prescott is fighting hard for the plan in the face of criticism by unions and pilots, who yesterday opposed the sell-off at the Commons Select Committee on the Environment. He is said to have the staunch backing of Gordon Brown, the Chancellor, and Mr Blair for the plan, which could raise an estimated £500m.

The Deputy Prime Minister was prepared for a showdown with Labour MPs who oppose his plans at the weekly Parliamentary Labour Party. Party officials said Mr Prescott turned in a vintage performance, and was cheered after he insisted that selling shares in public companies would raise money for hospitals and schools.

Mr Prescott also took a popular sideswipe at Ken Livingstone, warning that his plans to raise money for Underground investment through bonds would not have stopped an overrun on the costs of the Jubilee line, leaving Londoners with a bill for £1.5bn extra. Friends of Mr Prescott said the rebel Labour MPs had "lost their bottle" by failing to show up for the meeting but last night they were facing the prospect of a long campaign to secure backbench support. Martin Salter, the Labour MP for Reading West, covering many air traffic controllers, attacked the Nats sell-off as "unnecessary and divisive".