On cuts, rebels, and even those offshore trusts - Blair fights back

Tony Blair last night faced down critics inside and outside the party. He refused to 'bottle out' on the lone parents' benefit cut, and backed his Paymaster General, Geoffrey Robinson, to the hilt. Anthony Bevins and Fran Abrams witnessed a fierce fightback.

The Prime Minister, ministers, whips - and libel lawyers - yesterday took concerted action to quell internal party dissent, and external attack on the integrity of the Government

While the Sunday Times and Observer received lawyers' letters demanding front-page apologies for allegedly defamatory articles about the personal tax affairs of Mr Robinson, the Prime Minister defiantly stood by his colleague and friend in a Channel 4 News interview - and told potential backbench Labour rebels that there was no alternative to making the proposed cut in lone parent child benefit.

Faced with a host of "worthy claims", from farmers and miners as well as lone parents, and a budget deficit that had to be dealt with, Mr Blair said that if the Tory legacy was not tackled, people would say, "We bottled out; didn't take the right decisions; and ended up with the old boom and bust Tory cycle, and interest rates at 15 per cent, and borrowing out of control.

"Then you'd find it wouldn't just be cuts in single parents' benefit, or any of the rest of the things on the agenda, it would be massive changes to public spending as a result of having lost control of the economy. We can't do it."

Ministers and Labour whips were mounting a "good guy, bad guy" exercise as MPs returned to Westminster - with some of them intent upon rebelling against the lone parents' benefit cut in a Commons vote on the Social Security Bill tomorrow night.

Rebels predicted that between 20 and 30 MPs would vote against the Government and there was talk of more revolts to come - on disability benefits and on the creation of an elected mayor for London. At least 120 Labour MPs are thought to be unhappy with the lone parents' measure, which will leave new claimants about pounds 10 a week worse off from April.

Last night, Westminster rumours were rife that MPs were being asked to stay away if they could not bring themselves to support the Government. Loyalists were being asked to cancel other arrangements to ensure that they could be present. A select committee trip to Ulster was postponed. A stream of backbenchers was invited to meetings with ministers, and some emerged encouraged by what they had heard.

However, others, perhaps those less likely to respond to the tea-and- biscuits treatment, were being approached by party whips. Brian Sedgemore, MP for Hackney South and Shoreditch, wrote to Nick Brown, the Chief Whip, describing the whips as "arm-twisters and goolie-crushers".

But Mr Blair's stand last night marked out his determination to remain firm on the need to bring the economy back to balance - combined with an appeal to supporters to have patience, and faith.

As for Mr Robinson, his lawyers' letters showed he had the ability, and the financial clout, to look after himself. There is to be no Treasury support for his legal moves.

His lawyers told The Sunday Times that its weekend report, headlined "Robinson's Bermuda Tax Haven", was inaccurate and defamatory, adding: "Mr Geoffrey Robinson has never had any money, shares or any assets in Trust or otherwise held in Bermuda. Neither Mr Robinson, nor his wife, nor children are or ever have been beneficiaries of any Trust in Bermuda, or in any way connected with such a Trust."

The Observer allegations were more complex - suggesting that Mr Robinson was something more than a discretionary beneficiary of the Guernsey-based Orion Trust, as the minister had agreed in a statement on 29 November. The lawyers' letter said that was untrue and his earlier statement remained entirely accurate.

Mr Blair said last night: "In a society, you get two sorts: those that carp and are cynical about everything, and those that actually want to try and do their best, in an imperfect world, to make a contribution." He said Mr Robinson was a highly-experienced businessman, and an extremely good minister, who gave his high-calibre services for no ministerial salary.

An ICM poll in today's Guardian found that 58 per cent of people believed the Government was wrong to cut single parent benefits, while 22 per cent thought it was right.