The shadow Employment Secretary, Harriet Harman, has tabled parliamentary questions asking Mr Portillo to withdraw the measure, or at least to lay down that workers should not be forced to work for less than the £36.20 job-seeker's allowance.
But Employment Department sources indicated yesterday that Mr Portillo would reject both the Labour demands.
Ms Harman said yesterday that the measure was "a charter for slave labour", which would only encourage employers to drive down wages still further. "The Government thinks that poverty is the answer to unemployment, and it is not."
The Opposition is promising to revive its challenge during the parliamentary passage of the Job Seekers Bill, after receiving official figures confirming that 75,000 men and women earn less than £1.50 an hour.
Labour's attack is part of a general offensive on the Government under the heading "Life's worse under the Tories." Pay, job insecurity and greed in the boardroom will figure in Tony Blair's speech at a Labour local government conference in Brighton today.
Mr Blair won the first formal victory yesterday in his battle to modernise the Labour Party's constitution.
Young Labour, the youth wing of the party, voted by a majority of 68 per cent in favour of reform of Clause Four. Another 17 per cent of delegates at their conference in Brighton voted against andf 14 per cent abstained.
The leadership pulled out all the stops to secure the victory.
Mr Blair warned some of the 350 delegates at a reception that updating the clause was vital to winning the next election.
And John Prescott, the deputy leader, made an impassioned plea to the conference to put the party's traditional values in a modern setting. "We have nothing to be scared of," he said.Reuse content