Labour opponents of the Education and Inspections Bill demanded that ballots of parents should be held before community schools become one of the new type of independently run trust schools to be set up under the measure.
Mr Blair was forced to rely on the support of the Tory opposition to defeat a rebel amendment proposing compulsory ballots by 412 votes to 121. The rebels achieved their goal of exceeding the 52 MPs who voted against the measure in March. But government sources were confident the revolt had reached its "high water mark" and that the Bill would complete its Commons passage today.
His critics said the scale of the revolt put a question mark over Mr Blair's ability to push through his agenda and that he should stand down sooner rather than later. One said: "If he doesn't go by this autumn, we will lose the next election."
The rebels accused the Government of being "anti-democratic" by denying parental ballots. John Grogan, Labour MP for Selby, who led the call, asked: "What's so wrong with one parent one vote? I think it's a fundamental decision when a school decides to become a foundation. Should trusts be set up by three or four governors on a wet December evening after some sort of consultation?"
Helen Jones, MP for Warrington North, argued: "You have to trust parents to sift the information and make a decision. We trust them at a general election. Why not trust them in a ballot for the school?"
But Alan Johnson, the Education Secretary, dismissed the proposal as "too dictatorial and unnecessarily bureaucratic" and said the issue had been "blown out of all proportion".
He said: "It's a matter for the local governing body to consult. They have to ensure that that consultation is fair. They may or may not take the view to carry out a ballot. A ballot is not a touchstone for democracy."
Mr Johnson offered last-minute assurances to Labour opponents of the measure, striking a more conciliatory tone than his predecessor, Ruth Kelly, in an attempt to limit the Labour revolt to below 52. Gordon Brown, the Chancellor, phoned potential rebels to try to persuade them to support the Bill and ministers were boosted when some "soft" rebels said they would back it.
Mr Johnson outlined a string of safeguards over trust schools and to protect the position of local authorities. He said "high-performing" authorities and those with "diverse provision" would be able to put forward plans to open new community schools. He confirmed the schools inspectorate Ofsted would be able to monitor trust schools.
Addressing another concern of Labour MPs, he insisted that a low number of faith schools in an area would not be used to measure the diversity of local education when decisions were taken on whether to create new trust schools.
The Tories have moved ahead of Labour as the party with the best policies on education, health, law and order, immigration and tax, according to an ICM poll in today's Guardian. It put the Tories on 38 per cent, Labour on 34 per cent and the Liberal Democrats on 20 per cent.
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