Blair faces revolt by unions on PFI deals

Tony Blair is facing a new revolt from Labour's grass roots over the Government's plans to use private enterprise to revolutionise public services.

Union leaders and constituency activists are threatening to humiliate ministers at next month's Labour Party conference with their call for an end to new schemes under the Government's flagship public-private partnership.

Leaders of the three main public service unions, Unison, the GMB and the Transport and General Workers' Union, are understood to have held talks about a united push for a full conference debate.

Motions already submitted by Unison and the GMB to next month's TUC conference call for a moratorium on public-private sector deals.

But the prospect of a confrontation at Labour's own conference is potentially far more damaging for Mr Blair. Union leaders backed away from a revolt last year in the wake of 11 September but say this year's gathering will have to deal with unfinished business, in a move that threatens to worsen Labour's stormy relationship with the unions.

Emergency motions being circulated among rank-and-file Labour activists also call for an end to new private finance initiative (PFI) schemes, which have angered union leaders by threatening public sector jobs. The campaign, which includes dozens of constituencies and labour movement organisations, will criticise PFI schemes in the NHS and education as "unaccountable, uneconomical and unpopular".

John Edmonds, general secretary of the GMB, said: "This year the feeling against this is so strong that we can't brush it under the carpet. The Government has not made the case for the private sector or for private involvement in public services."