Opponents of Mr Blair on the left and right of the Labour Party claimed the "tide was turning" against him over Lib-Lab links following the resignation of Peter Mandelson, who was the Cabinet's strongest supporter of closer ties with Paddy Ashdown's party.
It emerged that the new alliance between John Prescott, the Deputy Prime Minister, and Gordon Brown, the Chancellor, aimed at reasserting "traditional Labour values", will extend to opposing Mr Blair's moves to bring Labour and the Lib-Dems closer.
In a further setback to Mr Blair, he came under pressure to sack a close adviser who called for an eventual Lib-Lab merger. Philip Gould, his pollster and strategist and a close ally of Mr Mandelson, called for the two parties to join forces in an interview with The Independent in October.
Labour First, a 600-strong group of moderate Labour activists normally loyal to Mr Blair, said it was "outraged" by Mr Gould's "almost treacherous" behaviour.
"By what right does this self-appointed, self-opinionated wretch try to start a major row in the party?" the group asks in its latest newsletter. "Mr Gould should be thrown in the dustbin of history as a genuine enemy of the party."
Although Mr Blair will not distance himself from Mr Gould, his allies are worried that the new alliance between Mr Prescott and Mr Brown will make it harder to extend co-operation with the Lib Dems.
"They have seized their opportunity," one Blair ally admitted last night. "There is no doubt the balance of power in the Cabinet has changed. It is highly significant for our relations with the Lib Dems."
One minister said Mr Brown had been "driven to distraction" by "silly criticism" of his economic policy by Malcolm Bruce, the Lib Dems' Treasury spokesman. Like Mr Prescott, the Chancellor opposes the introduction of proportional representation for House of Commons elections.
The minister said opposition to closer ties was not a "left-right" issue, with many newly-elected Blairite MPs hostile to the Lib Dems because they now formed the opposition to Labour at local level.
The growing revolt will make it harder for Mr Blair to extend the work of a cabinet committee that includes senior Lib Dems from constitutional reform to other policy areas.
Some ministers are furious that the Lib Dems are demanding access to confidential cabinet papers, saying this would give them more information than Labour ministers and MPs.
In a BBC Radio interview yesterday, Mr Prescott insisted he was "fully on board" with Mr Blair's strategy but stopped short of endorsing his plans to widen the cabinet committee's brief. "Let us see if we can get co-operation," he said.
The Deputy Prime Minister praised Mr Blair's "vision and courage" and insisted his modernising Government was in tune with Labour's traditional values.
Referring to his interview in The Independent this week which revealed his new partnership with Mr Brown, he said: "I wanted to nail the lie that there was a feud between Gordon Brown and John Prescott."Reuse content