In his speech to the Labour conference in Blackpool, the Prime Minister will urge his party not to lose its nerve as the Government starts to confront "tough decisions" on the economy, welfare and the efficiency of the public sector.
He will place teachers and doctors in the front line of a Government move to tackle against what ministers privately call "the vested interests in the public sector".
Mr Blair will announce that heads whose schools perform badly will be sacked, but those who turn round bad schools will get extra pay.
"There is no greater injustice to a child than a poor education," he will tell the conference. "There will be rewards for good teachers but no room for bad teachers."
He will reveal that doctors in the NHS will face new checks over their performance and more rigorous selection procedures. Poor doctors may be forced to retrain.
Ministers claim the doctors are a "law unto themselves" and have too much say over treatment, their pay and bonuses and disciplinary procedure. They believe the baby deaths scandal in Bristol will persuade the public to support radical change.
Another "vested interest" on the target list is the police, although Mr Blair may not reveal his hand today. Ministers are worried that efficiency levels of different forces vary widely and believe chief constables have too much power.
Although Mr Blair will insist that the public sector "will be modernised according to our principles and values", one ally said last night: "There will have to be sacrifices, and there will be squeals of pain."
The speech marks an important change of gear by Mr Blair, who believes the Government is entering a critical mid-term phase after taking some of its easier decisions in its first 17 months in office.
"It's time to bite the bullet," one aide said.
Mr Blair will warn his party that the reforms will attract "opposition and controversy" but that "radical change never came without a struggle".
Admitting that his Government may become unpopular as a result, he will say it is better to be unpopular than wrong. We need to show the same resolution changing the country as we did in changing the Labour Party."
Denying that his plans to reform welfare have run out of steam, Mr Blair will signal legislation in the Parliamentary session starting in November to reform benefits for the sick and disabled, which soak up pounds 25bn of the pounds 100bn social security budget.
The new law will tighten up the medical tests and qualification rules for invalidity benefit, which ministers claim is open to abuse.
But in an attempt to limit the controversy, the new regime will apply only to new claimants, so existing ones will not lose their benefits.
Mr Blair will announce a new package of measures to reduce crime, including a pledge to cut car crime by 30 per cent in five years.
Pledging his support for "zero tolerance" of crime, he will reveal that 25 to 30 towns and cities will run pilot schemes in "hotspot policing", modelled on New York.
It will involve blitzes by police to tackle pockets of high crime, and will mean more young people being taken to court rather than being let off with a caution.
The Prime Minister will risk the wrath of his party by restating his commitment to low taxes, saying that New Labour did not win last year's landslide by saying it would "tax people through the roof".
While he will say he understands the anxiety caused by the world economic problems, he will rule out any U-turn and insist that Britain can weather the global storm.
There is no question, he will say, of changing the Bank of England's inflation target or its remit - a course demanded by the trade unions. He will also reject calls for action to bring down the value of sterling.
While adopting Margaret Thatcher's "there is no alternative" theme, Mr Blair will reassure his party that he does not share Thatcherite values. He will reject her cult of "crude individualism" and speak of his strong belief in "community, partnership and fairness".
Mr Blair will endorse the tough message to the conference yesterday by Gordon Brown, the Chancellor, who insisted that the Government would not change course to court short-term popularity.
Mr Brown also sought to draw a line under recent tensions between him and Mr Blair. He effectively promised not to plot against Mr Blair in order to become Prime Minister.Reuse content