PM looks to a third term with plea for party unity

Tony Blair issued a stark warning to Labour MPs yesterday that their increasing criticism of the Government could deprive the party of an historic third term in power.

The Prime Minister showed his frustration over a series of damaging Labour backbench rebellions on Iraq and his public-service reforms when he pleaded for unity at a private meeting of the Parliamentary Labour Party.

Recalling the civil wars that bedevilled previous Labour governments, he said: "If you look back at our history, we are better at putting ourselves out than the Tories." He added: "There's a tremendous prize. Let's take that prize, not give it away to the Tories."

Until now, Mr Blair's aides have played down his current difficulties as a bout of the "mid-term blues" that afflict all governments. But in a change of tack, Mr Blair warned Labour rebels that their continuing opposition could let the Tories back in.

His plea came the day after the Government's majority of 164 was cut to 35 in a rebellion over his policy to set up foundation hospitals. An even bigger revolt in the autumn could wreck proposals to allow universities to charge top-up fees of £3,000 a year.

Mr Blair reminded MPs that, next month, his administration will become the longest-serving Labour government. He admitted the party was enduring a "difficult, tough patch", but claimed it was more ideologically united than at any time in its 100-year history.

Mr Blair said the party needed to explain to voters what it had achieved. He said Labour had to stick to its "basic values" of "a decent chance for all" and access to health care and education. He added that the Tories were more extreme than under Margaret Thatcher, and pursuing an agenda that was "anti-asylum, anti-EU, anti-tax and therefore anti-public spending". He said: "The dividing lines are on values, not just issues."

Most of the MPs at the meeting endorsed the appeal for unity. But they criticised the Government for relying on the votes of 40 Scottish Labour MPs to avoid a defeat on foundation hospitals, even though the Health and Social Care Bill would not apply north of the border. Alice Mahon, Labour MP for Halifax, said: "They've given the Government its majority." She pointed out that John Reid, the Health Secretary, who represents a Scottish seat, was "not going to have one of these divisive hospitals". Tam Dalyell said: "Ministers should not be taking decisions in which their own constituents are not affected."

Mr Blair clashed with Iain Duncan Smith over the issue at Prime Minister's Questions. The Tory leader asked whether the Government would rely on Scottish Labour MPs to force through top-up fees, even though "they have been rejected by your own party in Scotland".