Leaders of more than two million employees failed in their attempts to thrash out a united front over public services to present to the Prime Minister last night.
Public service unions were hoping to go to a "working dinner" at Downing Street armed with a declaration condemning Tony Blair's insistence on increasing private-sector input into state-funded services.
But deep splits between the unions emerged at a meeting of the ruling general council of the Trades Union Congress which could be exploited by ministers who support radical reform.
Some of the big general unions indicated they would be prepared to "do a deal" over business involvement, while others, such as the education and specialist health unions, would not have it at any price.
John Monks, the TUC general secretary, hoped unions would unite around a "partnership pact" with the Government which would engender a more co-operative atmosphere.
Mr Blair called last night's meeting to ease union leaders' fears that the Government was seeking confrontation over the issue.
Addressing his first meeting of the Parliamentary Labour Party since the election, the Prime Minister attempted to allay the fears of Labour left-wingers. He insisted the Government was not plotting back-door privatisation of schools and hospitals. But he stressed that the public expected the Government to push through a fundamental overhaul of public services.
Afterwards, a left-wing MP said: "The party uses the word privatisation. The Prime Minister uses reform. There isn't a meeting of minds."
Later, making clear his determination to press ahead, Mr Blair told the Commons: "We are not going to back down on essential reform of public services."
Downing Street insisted last night that Mr Blair was not seeking confrontation in his meeting with union leaders. He would take the opportunity to "open a dialogue" on the subject, as well as correcting "misinterpretations" over the plans.
The Nottingham South MP, Alan Simpson, claimed yesterday that more than half of Labour's 412 MPs were worried about moves to involve the private sector.
The dinner was arranged after the annual conference of Unison, the country's biggest union, voted to review its links with the Labour Party in protest over the Government's public-sector policies.
Dave Prentis, the general secretary of Unison who argued against the review, took a relatively moderate line last night on the basis that tens of thousands of his members have already been switched to private companies.
While Mr Prentis is an implacable opponent of the Private Finance Initiative in which businesses build hospitals and run them, he is more concerned to protect his members' terms and conditions when they are transferred to the private sector.
Physiotherapists leaders' and representatives of the teaching unions, however, wanted a TUC statement opposing any suggestion that their members should work for the private sector.
The GMB general union predicted that there would be a "snowstorm" of motions to the Labour Party's annual conference attacking "creeping privatisation".
A senior source at the union said ministers had made a "very, very serious blunder" by seeming to take the unions on. He added: "The political imperative for the Government is to deliver better public services or come the next election they will be toast.
"The only way they can achieve it is with the co-operation of the workers. The Government was briefing against the unions during the election and it did so after the Queen's Speech. We have been turning the other cheek, but we won't be doing it again. They wanted a debate on the public services, well now they are going to get one. If they want reform, then they have to look at it as a whole, taking into account investment and the pay and conditions of our people. If Downing Street thinks union leaders are ahead of their members on this issue then it shows the worrying extent to which they are out of touch."
Bill Morris, leader of the Transport and General Workers' union, has submitted a motion to the annual TUC Congress which could provide a dress rehearsal for a debate at the Labour Party conference.
In it the transport union rejects the notion that efficient public services can only be provided by, or in partnership with, the private sector. The motion says public services have a "social worth well beyond the profit motive".
The leader of the MSF technical union, Roger Lyons, said he was not against private investment, but declared his opposition to any attempt to switch clinical specialists such as pathologists to the private sector.Reuse content