Mr Jackson, leader of the Amalgamated Engineering and Electrical Union (AEEU), receives a knighthood for "services to industrial relations".
A staunch supporter of Mr Blair's project to modernise the Labour Party, the 62-year-old former electrician has used his influence to win votes for the Prime Minister at the Trades Union Congress and at party conferences.
The AEEU hands over nearly pounds 1m a year in affiliation fees to Labour, a fact that was used by Mr Jackson when he called last year for more "working class" parliamentary candidates.
The union has pushed heavily for a single currency and offered to fund campaigns in any referendum, but it is also determined to halt moves to proportional representation.
Sir Dennis Stevenson, chairman of Pearson plc, publisher of the Financial Times, becomes a life peer. Pearson donated large sums to Labour in the run up to the 1997 general election.
Privy councillorships go to Sir Alan Haselhurst, the deputy speaker of the Commons, Barry Jones, former shadow Welsh secretary and MP for Alyn and Deeside. Eddie George, the governor of the Bank of England, and Giles Radice, MP for Durham North, also join the Privy Council.
The Manchester United manager Alex Ferguson, who is knighted for his services to football, is well known for his support for the Labour Party and friendship with both Mr Blair and Alastair Campbell, the Prime Minister's spokesman.
Sir Norman Foster, New Labour's most favoured architect, becomes a life peer.
John Major's wife, Norma, becomes a Dame for her "public and charitable services", particularly for her support for Mencap.Reuse content