MPs told: 'Back changes, or we lose'

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Cabinet ministers have warned rebel Labour MPs that the party risks losing the next general election if it "bottles out" of radical reforms to health, education and welfare.

At a three-hour special cabinet meeting to plan a fightback after Tony Blair's first Commons defeat last week, ministers united behind the Prime Minister by saying they were at a crossroads for New Labour.

Patricia Hewitt, the Health Secretary, compared Labour backbench opposition to Mr Blair's reforms to the Wilson government's rejection of Barbara Castle's In Place of Strife White Paper in 1969 to curb trade union power. Labour lost office in 1979 following a wave of strikes in the "winter of discontent", and Margaret Thatcher reformed the industrial relations laws.

Ms Hewitt told The Independent : "Several people made the point that the Conservatives want to present the Labour Party as if you had the Prime Minister and a handful of people in favour of reforming public services, and everybody else, whether in the party or the Cabinet, against him. That is untrue but it also would be politically disastrous.

"We have been here before. Several of us were recalling In Place of Strife when a Labour Party bottled out of reform that was too difficult." Yesterday's cabinet session, without civil servants present, reiterated its determination to press ahead with the public service reforms in Labour's election manifesto. It was dominated by education and was given a detailed presentation by Ruth Kelly, the Education Secretary, on the White Paper on schools she unveiled last month.

Mr Blair and Ms Kelly will today begin a campaign to "sell" proposals to give schools more independence amid warnings that 100 Labour MPs could oppose the Education Bill in the Commons in February or March. A Downing Street spokesman said Ms Kelly's presentation received "strong and enthusiastic" support from the Cabinet.

John Prescott, the Deputy Prime Minister, who has expressed doubts about plans to dilute the role of local education authorities, and Gordon Brown, the Chancellor, will join the campaign in an attempt to dispel the idea that Mr Blair is an isolated figure.

Mr Blair, who is furious at suggestions that he is more concerned with his legacy than Labour's future prospects, believes that his reforms are crucial to securing a fourth term.

A No 10 source said: "Throughout the meeting, there was consistently strong reaffirmation of the need for the Government to continue to occupy the centre ground of politics, and to sustain its programme of reform".