War was a political disaster for Labour and Cabinet was complicit, says Cook

Joining the American-led war in Iraq was a "first-class political disaster" for Labour, dealing a heavy blow to the party's morale, the former foreign secretary Robin Cook said last night.

He made a devastating attack on the case for war at a packed fringe meeting organised by The Independent, arguing that the whole Cabinet was "complicit" in the decision to back military action.

Clare Short, who resigned as International Development Secretary, renewed her call for Tony Blair to resign for the sake of the party and the country.

"We have lost trust and it won't be regained," she said. "We could struggle on and we could even win the next election but with a not very motivated party. It would be better for Tony, the party and the country if he went voluntarily."

John Reid, the Secretary of State for Health, delivered a staunch defence of the Government, insisting that "Our Prime Minister is not a liar", while telling an audience of 500 delegates it would be "extraordinary" if the party cast aside a leader who had delivered the two biggest election victories in Labour's history.

The meeting heard Mr Cook, who resigned from the Cabinet over the war in Iraq, describe how the conflict could only be described as a "disaster" across the political spectrum.

He told delegates: "It is very difficult to find anybody in the parliamentary party who does not recognise this has been a first-class political disaster for the Labour movement."

He added: "I am in no doubt the party today would be much happier, much stronger and in much better heart if we had not gone to war."

Condemning the role of the Conservatives in "egging on" the Prime Minister, Mr Cook also claimed that if Kenneth Clarke and not Iain Duncan Smith had been Tory leader, British troops may never have been sent into action.

He added: "I don't discount the possibility that the neo-conservatives in Washington are planning another intervention. I think next time they come knocking on our door looking for support, they should get a different answer."

Mr Cook went on to call for the Government to pursue a more openly left-wing agenda, as opposed to introducing reforms to redistribute money to the poor by "stealth".

He continued to describe how under Mr Blair, the Government had been content to live within the political landscape inherited from Margaret Thatcher, rather than reshape it to fit left-wing values.

"Thatcher wrenched the parameters of politics to the right," he said. "I believe our task is not to live within those parameters. Our task is to find the language and the vision that wrenches those parameters back to the left."

Mr Reid, who fiercely defended the Government's decision to commit British troops to Iraq, said the attacks on Mr Blair were "sad and naive" and ultimately played into the hands of the Tories. He said: "There is a naive belief that by attacking [the Government] from the left, you can end up with a more left-wing government. You won't. You will end up with a Tory government."

He added: "Note the real enemy and that's not Tony Blair." He was responding to Ms Short's charges that Mr Blair was an "elitist" leader who had abandoned Labour's traditional values by allowing unelected advisers in Downing Street to make policy without consultation with the party.

Ms Short said: "I think this offends Labour values, I think it offends democratic decision-making, and those values are intrinsic to what we stand for."

Ms Short criticised the policy of creating foundation hospitals and warned that imposing university top-up fees of up to £3,000 a year was a threat to Labour's belief in social justice.

She told the meeting: "On foundation hospitals and top-up fees we get a decision made by a small in-group at Number 10, not consulting others, not consulting those who work in the services that are affected, and you get very bad decision-making."

Mr Reid, the Secretary of State for Health, said foundation hospitals were a response to the changing needs of today's NHS patients. He told delegates: "If it comes to a choice between what the people want and what the politicians or the trade unions want, then as a social democratic party seeking to represent 60 million people, their ambitions should come first."

He said the aspirations of the working-class had changed over 100 years. They were now consumers of public services on a massive scale and deserved consumer choice.

Ms Short's attack came as the Labour high command attempted to quell the criticism of Mr Blair's leadership by promising that he would consult more fully before government policies were announced.