Labour rules out reform U-turn

The Labour Party last night described as "fantasy" a report claiming Tony Blair had made a U-turn on promises to hold a referendum on electoral reform during the first term of a Labour government.

In a statement issued after the Times newspaper made the claim, party officials denied there had been a change in policy, which would sour relations with the Liberal Democrats. They reaffirmed Mr Blair's commitment to the referendum.

A party spokesman said a formal announcement of its proposals would be made within weeks, at the end of talks with the Liberal Democrats on a range of constitutional reforms. The issues being discussed include a Bill of Rights, the introduction of a Scottish parliament, reform of the House of Lords and a Freedom of Information Act.

The Times quoted Labour sources as saying that Mr Blair's opposition to the introduction of proportional representation, which would in all likelihood increase Liberal Democrat representation in the House of Commons, was hardening. It said senior Liberal Democrats feared that Labour planned to back down.

But a Labour spokesman said last night that a statement would be made soon, "announcing a referendum on electoral reform in the first term of a Labour government. Any stories suggesting otherwise are pure fantasy." Robert Maclennan, the leader of the Liberal Democrat negotiating team, said he was not aware of any change of heart. "This rumour does not reflect the tenor of the discussions that have been going on between the two parties," he said. "It seems like complete nonsense". The Liberal Democrats have made it clear that without agreement on electoral reform, an alliance, however loose, could not be forged.

Workers would be encouraged to trade flexibility for job security under a Labour government. In an article in today's Guardian, Peter Hain, the shadow Employment Minister, hailed job-security agreements reached with unions by Blue Circle Cement and United Distillers.