Clare Short last night condemned Tony Blair as an "elitist" leader who had abandoned Labour's traditional values by allowing unelected advisers in Downing Street to make policy without consulting the party.
The former International Development Secretary told a packed fringe meeting organised by The Independent that top-up fees, foundation hospitals and the Iraq war were symptoms of a top-down approach at the heart of government.
She told the audience of 500: "I think this offends Labour values, I think it offends democratic decision making, and those values are intrinsic to what we stand for." Ms Short criticised the policy of creating foundation hospitals and warned that imposing university top-up fees of up to £3,000 a year was a threat to Labour's belief in social justice.
"On foundation hospitals and top-up fees we get a decision made by a small in-group at Number 10, not consulting others, not consulting those who work in the services that are affected and you get very bad decision-making."
The Labour high command is trying to quell criticism of Mr Blair's leadership by promising that he would consult more fully before Government policies are announced. But Ms Short renewed her scathing attack on Mr Blair's stance on Iraq. She said: "What happened on Iraq is that Tony, believing that it was right, made the decision that we should to do something, didn't tell us all; the cabinet, parliament, the country and the party why he decided that. He decided that was right, as if he had a right to decide what was right."
Dr John Reid, the Secretary of State for Health, said foundation hospitals were a response to the changing needs of today's NHS patients. He said: "If it comes to a choice between what the people want and what the politicians or the trade unions want, than as a social democratic party seeking to represent 60 million people, their ambitions should come first."
He said aspirations of the working class had changed out of recognition in 100 years. They were now consumers of public services on a massive scale and deserved consumer choice.