Mr Hattersley dismisses the idea that concerns expressed by the backbencher Richard Burden and the union leader John Edmonds were simply "summer madness". Writing in the Independent, he says: "The criticism would evaporate overnight if there were not a deeper and more general concern about policy." And he says that, unless Mr Blair "makes his true position clear, the little local difficulties that he experienced last week are going to multiply".
Having hit Labour over the suspension of Walsall Labour Party, the Conservative Party chairman, Brian Mawhinney, will be taking the Tory attack on "the loony left" to the Labour leader's backyard next week in a trip to the North-east.
Mr Hattersley's warning came as other senior Labour figures said the backlash against the modernisation under Mr Blair should not scare the leadership into changing course.
Mr Blair will be urged privately not to swing to the left over British Rail as a "knee-jerk" attempt to reassure the left-wing and trade union movement that Labour was sticking to its principles.
"The objective is a publicly owned, publicly operated railway. Our policy is to stop privatisation happening. That is an attainable goal. It would be wrong to start making pronouncements which could undermine that fight," said one source.
Mr Hattersley called for a massive house-building programme. He says a speech by Mr Blair which promised "a massive building programme" - housing associations and local authorities - would do wonders for party morale.
He accuses Mr Blair, whom he still strongly supports, of focusing on the plight of property-owners at the expense of the homeless. "For a year, the issues we have articulated most clearly have been the subjects that worry the suburbs.
"Negative equity is, no doubt, a traumatic experience for owner occupiers. But in my constituency, there are families whose housing problems are rather different."
And he calls for a stronger commitment to tackle poverty: "Although I can recall the speeches on the need to protect elderly property owners, I do not know how we propose to improve the basic pension."
Mr Hattersley confirms that disquiet about Mr Blair's leadership extends to the Shadow Cabinet, saying that, if he reaffirmed the party's concern for the poor, "those members of the Shadow Cabinet who whisper that they would do better were it not for the leader's heavy hand would be forced into private as well as public loyalty".
He even seems to suggest that there is some truth in Mr Burden's suggestion that the leadership is trying to suppress debate: "A policy debate within the party is now unavoidable - desirable or not." He warns Mr Blair that party members need to be "reassured about the purpose of winning ... Tony has much in common with the grassroots. Heaven knows, we need him. But he needs us as well."
Yesterday John Edmonds, whose GMB union holds one of the key block votes at Labour conference, called for a pause in the Blair revolution. "At some stage, good sense suggests a period of consolidation", he said.
Hattersley warning and Mawhinney profile, page 15Reuse content