The former deputy leader of the Labour party has rebuked Tony Blair and accused him of being "captivated by private enterprise".
Lord Hattersley attacked the Prime Minister's attitude to the trade unions and said most of his cabinet "don't know how trade unions work".
The Labour peer said he believed a battle with the trade unions and the party leadership was brewing because of its critical approach to the unions and their members.
He described Mr Blair's attitude as an "extension of Mrs Thatcher's general view that the public service is doomed to failure".
"If the Prime Minister, as I fear is his character, goes on trying to rub their noses in it, tell them how inefficient they are, tell them they are all Luddites, tell them all that they aren't capable, competent of running public services, then I fear they'll have a confrontation," Lord Hattersley said in an interview with the political web site ePolitix.com.
"What has to happen now is the Government has to find an accommodation with the trade unions.
Lord Hattersley singled out Deputy Prime Minister John Prescott as the only Cabinet Minister who understood trade unions.
He said that Mr Blair's "gung-ho ministers have exuded contempt for public services and public service unions".
"I think too many people on the Blairite Labour Party think that all the men and women who work in the hospitals think of is 'what's going to be in his pay packet at the end of the month'," he claimed.
Lord Hattersley did, however, praise Tony Blair's offer to meet the leaders of the unions six times a year, which he described as a "step in the right direction".
Lord Hattersley said the meetings would "educate ministers".Reuse content