The Prime Minister and his Secretary of State for Health, Patricia Hewitt, are gearing up for a confrontation with NHS staff opposed to the growing use of private clinics and diagnostic centres. But Mr Blair's allies are more worried about Gordon Brown's long-term plans. They fear that if he becomes Prime Minister he will curb the use of private health companies - not for political reasons but because he thinks there are better ways to spend NHS money.
The prospect of Mr Blair staying in Downing Street for another three years to push through the reforms will infuriate left-wing MPs, who have called for him to quit before next year's council elections in May.
Some London MPs, such as the former transport minister Glenda Jackson and the former health secretary Frank Dobson, believe that Mr Blair is now a vote loser who will cost seats in the London borough elections.
Other MPs, close to Mr Brown, think that an appropriate time for Mr Blair to quit will be when he has completed 10 years as Prime Minister, in May 2007. But speaking in New York last week, Mr Blair insisted that he would stay until his reforms have "bedded down".
Earlier in the week, the former health secretary Alan Milburn said it sent "a shiver down his spine" when he heard Labour politicians talking about the need to move the party to the left.
The Department of Health is about to invite health companies to bid for another £3bn-worth of contracts to diagnose or treat NHS patients. The money was finally released after intense argument behind the scenes with Treasury officials. The latest move was condemned by the TUC at its annual conference in Brighton last week. The unions deplored the use of the private sector "while NHS equipment stands idle for much of the week".
But Ms Hewitt has insisted that the NHS must have excess capacity if patients are to be given a choice of where they want to go. She is also hoping that bringing in the private sector will force NHS managers to sharpen up the way that hospitals and clinics are run.
Health officials also argue that patients are less likely to catch infections such as MRSA from one another in a hospital that is at 85 per cent of its capacity than one in which every bed is in use.
A source close to Mr Brown said: "This is not a dogmatic debate about 'choice' or about the use of private sector facilities for public sector work. It's simply about making sure that the money allocated to health is used with maximum efficiency."