The final meeting of the Cabinet before the summer break, chaired by the Prime Minister, decided to attack Mr Blair's leadership by highlighting clear policy differences between Labour and the Tories.
But Douglas Hurd, the Foreign Secretary, last night challenged the agreed strategy with a warning to the party not to desert the centre ground of British politics by shifting to the right in response to the threat from Labour under Mr Blair.
The warning came as it emerged that John Prescott, Labour's deputy leader, will take on a wide-ranging role, including campaigning on Labour's European policy and its support for the social chapter.
One Tory source said: 'The Cabinet felt that you have got to talk about policies and leave talk about Tony Blair's personality to his critics in the Labour Party and the media.'
He added: 'There was a feeling that after building him up, the press are already knocking him down.'