New spin row as Blair tells unions there's no way back

Tony Blair was at the centre of a new "spin" row last night after warning union leaders that they would be deluded to imagine a left-wing alternative to the Labour government.

The Prime Minister's aides issued a version of a hard-line speech he was going to make to union leaders, but Mr Blair significantly softened his tone when he addressed the ruling General Council of the TUC, according to officials who attended the private dinner. "Those who thought the end of spin was nigh, have had a nasty shock," said Mark Serwotka, leader of the PCS civil service union.

Other union leaders leaving the event at the Grand Hotel in Brighton said that his actual remarks were far more conciliatory than a press release issued before the dinner. But officials were split on whether he used some of the words attributed to him. Downing Street aides insisted that he did, although they said he may have "ad-libbed".

In his address the Prime Minister did insist that he would stick to his programme of public service reform. His meeting with union leaders came just hours after the Chancellor, Gordon Brown, received a cool reception from delegates at the TUC conference.

Mr Blair had been due to tell union leaders: "The idea of a left-wing Labour government as the alternative to a moderate and progressive one is the abiding delusion of 100 years of our party. We aren't going to fall for it again."

However, doubts later emerged over the actual form of words. Senior union sources said that while the Government had promised the end of "spin" with the departure of Alastair Campbell, changes to the Prime Minister's comments proved that he was still wedded to news management techniques. But Brendan Barber, general secretary of the TUC, who attended the dinner, said he believed Mr Blair's speech was a true reflection of the comment released to the media earlier in the evening.

In that release, Mr Blair said: "Sensible trade unions and most Labour Party members know this government is doing its best for working people. Despite their criticisms and disappointments they know that there is much to be proud of in our six years of government and that they have to unite and defeat those on the far left who have learnt nothing and those on the far right who have forgotten nothing." He warned that rejecting "diversity of supply, consumer choice and flexibility of working" would be as big a mistake as rejection of the sale of council houses in the 1970s. Union officials said Mr Blair also failed to refer to this section of his planned statement.

According to his aides, Mr Blair went on to say: "Be in no doubt. We will continue to build on our programme of investment and reform. But I know we can only demand that the public pay tax to fund public services if we are prepared to do what it takes to get the most out of the money we put in.

"It means using whatever works best, to get the best. The one-size-fits-all idea of public service, whether in the rigid application of the comprehensive principle in schools or in a centrally driven NHS, is no longer good enough for the 21st-century public service."

Mr Blair's comments infuriated union leaders who have expressed deep opposition to the introduction of foundation hospitals and moves to increase the role of the private sector in public services.

Derek Simpson, joint general secretary of Amicus, who was at the dinner, said: "Dismissing the legitimate concerns of working people as an irrelevant left-wing agenda is a slap in the face for millions of people. These words will not win Labour the next election. Action on tackling inequalities will."

Bob Crow, general secretary of the Rail, Maritime and Transport Union, who was not there, said the Prime Minister had misjudged the aspirations of the trade union movement. "Parties represent classes but under his leadership Labour is failing to represent working people," Mr Crow said.

The love affair between Mr Brown and the union movement came to an abrupt end as leaders of the Labour Party's biggest benefactors poured scorn on the Chancellor's attempt to rally the troops for a third term in government. With as little as 18 months to go before a general election, Mr Brown's keynote address to the TUC conference was given a cool reception by delegates, which differed little from the response they afforded earlier in the day to Digby Jones, director general of the Confederation of British Industry. A senior union source said: "He uttered a few pleasantries and then basically said, I'm the Chancellor; I'm in charge; you can all sod off."