Is Mr Blair's infatuation with big business spinning out of control?

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Cull of civil servants in wake of 'Mooregate'

Whitehall rejoices at demise of Jo Moore

From Garbagegate to Mooregate

The Labour Party's experts in spin are a fast-growing - and increasingly costly - breed

When two egos go to war

Leading article: Do not stop at Mooregate

When he was elected in May 1997 Tony Blair defiantly proclaimed: "We were elected as New Labour. We will govern as New Labour." From the beginning, he chose to define himself by what he was not. Under no circumstances would he lead an old Labour government. On the day of his supreme electoral triumph he was still haunted by the past: old Labour had bad relations with business. New Labour would have good relations. Old Labour had a terrible press. New Labour would elevate media manipulation to a new level, as important as the implementation of the policy itself. This would be new. This would be different.

There is a bleak film noir being played out here. With a bizarre twist, it is the new in New Labour that is leading the Government into stormy waters. In trying to avoid the iceberg that destroyed old Labour, the Prime Minister risks drowning.

The departure of Jo Moore – the latest spin doctor to become a bad news story – is nowhere near as serious as "Garbagegate", the story that blew up earlier in the week. This is partly because the Government itself has been aware for some time that it has a problem with spin in general, and Ms Moore in particular. On this issue the Government cowers nervously in the corner with its hands almost held aloft, half surrendering to the onslaught of criticism. Ms Moore was always destined to join Charlie Whelan, Peter Mandelson and others on the growing scrapheap of former spin doctors. There are not many of them left in government now. Even Alastair Campbell, who is still there, keeps warily in the background. As far as spin is concerned there is a bewildered defensiveness that extends to cathartic admissions of guilt. Spinners and their ministers accept that they made appalling errors in the early years, with overblown announcements that masked puny policy changes. At least, the Government has become alert to the dangers of spin.

Perversely, there is no such apologetic tone over Garbagegate. In my view, Ms Moore performed one final duty by inadvertently spinning this odd affair off the front pages. It is Garbagegate, and what it tells us about Mr Blair's supine attitude to business, that will continue to make waves. It will do so partly because the Government is so unaware of the dangers, in contrast to its self-critical introspection about spin.

The Prime Minister signs a letter supporting a steel magnate's business venture in Romania. What is wrong with that, ask his aides with seething indignation. Rather than being pilloried, Mr Blair expects applause for his relations with business leaders.

How easy it is to imagine him sitting on his sofa in his expansive Downing Street office signing the letter on behalf of Lakshmi Mittal with a proud flourish: "A Romanian privatisation? Yes, very New Labour." Probably he gave the letter no more than a moment's thought. I doubt if any of his senior aides, including Jonathan Powell, gave it much thought either. This is what New Labour does. It helps business. It approves of the privatising of companies in eastern Europe. I am surprised there was not a press conference in Downing Street in which Mr Blair stood side by side with Mr Mittal: a Prime Minister endorsing an Asian multi-millionaire, an Asian multi-millionaire endorsing Mr Blair – the dream New Labour photocall.

Normally Downing Street is neurotically obsessed by any potential trouble looming on the horizon. The corridors sweat with panic. The Prime Minister and his aides can even get worked up into a lather over the Conservatives. They can certainly get into a state about Ms Moore. When it comes to business leaders and the private sector in general there seem to be no antennae alert to any possible trouble.

Evidently, no one in Downing Street thought it worth uttering a warning to Mr Blair along the lines of: "Tony, we have had a request from the embassy in Bucharest for you to back a privatisation deal in Romania. It might prove embarrassing as the businessman involved has just made a large donation to the Labour Party. There is also a potential embarrassment in that the company is not British. Furthermore, quite a few private companies are making a killing in eastern Europe without greatly improving the old nationalised industries. And then there is the slight problem that steel workers in Britain are being made redundant. Do we want to be seen backing a foreign-based company as it takes over a steelworks in Romania? And, shall we put out some checks on our ambassador in Bucharest?"

There may have been satisfactory answers to some or all of these concerns. But the concerns were not even considered. Compare this casual approach with what would happen if, for example, Bob Crow, the new left-wing RMT union leader, contacted Downing Street to arrange a meeting. There would have been a flurry of frenzied activity. Advisers would suggest that such a meeting would play badly in the Mail and The Sun. Mr Blair's diary would suddenly be packed with engagements. No Crow would be allowed to fly into Downing Street without a thousand precautions being taken. Yet when a Bernie Ecclestone or Lakshmi Mittal seek a cup of tea in Downing Street there are no warning signals at all. Before they put the phone down Mr Blair has put the kettle on.

The Prime Minister and those around him are still conditioned by the almost fatal setbacks suffered by Labour in the late 1970s and 1980s. Yet this neurotic obsession with not being "old" leads this nervy government down paths that in themselves are potentially treacherous. The failure to invest more in public services during the first term is largely explained by the desire to remove old Labour's tax-and-spend image. The unswerving support for the US partly springs from a concern to purge any memories of old Labour being soft on defence.

But the biggest danger lies in a too rosy view of the private sector: the public-private partnership for the London Underground; some of the private finance initiatives; the uncritical admiration of business leaders. This is certainly 'New', it is not always right.

I once wrote that New Labour would never introduce the equivalent of a poll tax, a policy so catastrophic that it would almost bring the Government down. New Labour was too cautious and self-conscious for such a deed. But the caution and self-consciousness desert Mr Blair and his entourage in some of their dealings with the private sector. Mr Blair's blind spot for business could easily become his equivalent to Mrs Thatcher's poll tax.