Blair defends 'unpopular' public-sector reforms

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Tony Blair will launch a fightback today against claims that his Government has lost its way. He will seek to win back critics on the left and right who have deserted Labour.

In a speech in Liverpool, the Prime Minister will reassert his authority by saying he is prepared to take tough, unpopular decisions on public-sector reform - because they are right. Mr Blair's speech marks the start of a summer offensive to turn his attentions to domestic issues after almost a year dominated by Iraq. A week today, he will make a speech on his goals for a third term if Labour retains power at the next election.

Today, the Prime Minister will set out to rebuild the "broad coalition" that helped him to win the 1997 and 2001 elections. Aides admit he has lost support from the left because of the Iraq war and on the right because of his pro-Europe stance.

Five days before Labour MPs stage another Commons rebellion over foundation hospitals, Mr Blair will try to woo his critics by saying his modernisation programme is true to the values that have underpinned Labour since it was founded more than 100 years ago. He will say that Labour's task is "to prepare the country for the future on the basis of fairness and opportunity for all".

Mr Blair will concede he and his ministers have been too "technocratic" when making the case for policies. "We have explained what; we have not explained why," one aide admitted.