Two senior ministers admitted the Government had made mistakes by frequently criticising public-sector workers as Tony Blair performed a U-turn and praised their commitment yesterday.
Amid concern that ministers' attacks have damaged morale, the Cabinet has agreed to review working conditions.
The inquiry, headed by Nick Brown, the minister for Work, will consider improvements such as better training and technology, but will not consider public-sector pay.
Charles Clarke, the Labour Party chairman, told The Independent: "We can only deliver the quality public services we are seeking if the commitment of those who work in public service is matched by proper support."
He added: "Whatever mistakes were made, we did need to address the issue of reform. Unfortunately, the discussion of reform can sometimes be seen as challenging the commitment of people working in public service. It doesn't."
Peter Hain, the minister for Europe, said: "We've got to harness much more effectively the energy and enthusiasm and talent and professionalism of all public-service workers, and perhaps we haven't done that sufficiently and effectively until now."
One Blair aide admitted: "We adopted a Thatcherite approach to public-service workers. There is now a recognition that it has gone on too long."
Speaking in Newcastle, Mr Blair admitted his reforms to public services would not work without the backing of the staff. In an important change of tone, he praised public-sector workers for their dedication.
Trade unions cautiously welcomed Mr Blair's speech. But Jonathan Baume, leader of the First Division Association of senior civil servants, will tell GMTV's Sunday programme tomorrow that ministers are making NHS managers feel like scapegoats by interfering and by criticising them.