According to private polling and focus groups conducted for the Labour Party, people are also becoming increasingly doubtful that the Government will fulfil its promises.
The warnings will fuel demands for a change of emphasis, made since Peter Mandelson quit as Secretary of State for Trade and Industry. The calls have been led by John Prescott, the Deputy Prime Minister, who said last week ministers should "get away from rhetoric and back on to the substance of government". An internal Labour report sent to ministers, and seen by The Independent, suggests his anxieties are justified.
Headed "1999 message", it insists Labour continues to enjoy a strong position with a stable poll lead over the Tories, and is seen as "strong on the economy". However, it warns that private polling found "increasing concerns about delivery" and "anxiety that Labour may be getting arrogant and might be losing touch".
Yesterday, two senior trade union leaders increased the pressure on Mr Blair by endorsing Mr Prescott's stance.
Bill Morris, general secretary of the Transport and General Workers' Union, said on GMTV the resignations of Mr Mandelson and Geoffrey Robinson as Paymaster-General "might be a price worth paying" if the Government could "refocus its philosophy, its ideology and its purposes".
Ken Jackson, leader of the normally loyal AEEU engineering union, is backing Mr Prescott's opposition to Mr Blair's plans for closer links with the Liberal Democrats.
In a speech on Saturday, Mr Jackson will say: "We supported modernisation because we wanted Labour back in power, but the agenda of proportional representation, closer links with the Liberals and breaking the link with the unions is one with which we have no sympathy at all. We are called the Labour Party for a reason and we will fight to keep it Labour."
The strategy outlined in the report suggests Mr Prescott has won his battle for Labour to go "back to basics". The party's key message will be that the Government is fulfilling its pledges. It will highlight five key achievements: falling hospital waiting lists; a minimum wage helping two million people; pounds 40bn extra for health and education; a record increase in child benefit; and 150,000 young people benefiting from the New Deal programme for the jobless.
Labour will seek to prevent a Tory recovery in this spring's elections to local authorities, the Scottish and Welsh assemblies and European Parliament by warning voters that William Hague's party will "put at risk" the "better Britain" Mr Blair is building. "We are portraying the Tories as a threat," the document admits. "The Tories oppose what Labour is doing. and would try to undo it."
The strategy document points to the "key dividing lines" between the parties, saying Labour has "strong leadership" while the Tories are "still drifting and divided" and that Mr Blair's party is "for the future" while Mr Hague's is "still stuck in the past".
But the Tories went on the attack yesterday, claiming the Government was in a "state of meltdown" because of its lack of direction and the personal rivalry in the Cabinet. John Redwood, the trade and industry spokesman, accused Mr Blair of "lacking moral and political judgement" after Downing Street said he would not order Gordon Brown, the Chancellor, to dismiss Charlie Whelan, his press secretary.
Mr Whelan denies leaking details of Mr Mandelson's pounds 373,000 personal loan from Mr Robinson, which led to their resignations. He is due to return to work at the Treasury today.
When Parliament returns a week today, Mr Brown will face Tory questions over his links with Mr Robinson. Yesterday, it emerged that the millionaire donated up to pounds 200,000 to the Smith Political Economy Unit, which helped Mr Brown to draw up his policies while Labour was in opposition.
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