Labour critics revive founding group in new power struggle

Trade union leaders and party activists critical of Tony Blair are to revive the body that paved the way for the birth of the Labour Party in an attempt to reclaim it from New Labour.

In a highly symbolic move, the anti-Blair forces will set up a Labour Representation Committee (LRC) next Wednesday, during the party's annual conference in Bournemouth. In the most important rebellion so far against Mr Blair from within his party, the group will campaign for a return to Labour's traditional policies.

The original LRC was formed in 1900 by the party's founding fathers, including the Independent Labour Party, trade union leaders, the Fabian Society, Keir Hardie and Ramsay MacDonald. The LRC won 29 seats at the 1906 general election, after which it changed its name to the Labour Party.

The new-look LRC will win the backing of several prominent union leaders among the "awkward squad" who have challenged Mr Blair. This is a blow to the Prime Minister's efforts to woo the unions by setting up a new forum to discuss his public service reforms.

Union bosses sympathetic to the new group, to be launched at a fringe meeting, include Tony Woodley, of the Transport and General Workers' Union; Kevin Curran, of the GMB; Derek Simpson, of Amicus; Andy Gilchrist, of the Fire Brigades Union; Billy Hayes, of the Communication Workers Union; and Mick Rix, outgoing leader of the rail union Aslef.

The LRC will try to win control of Labour's official bodies "from the bottom up", including its national policy-making forum and national executive committee (NEC). The aim is to change the party's policies and ensure it fights the next general election on a traditional Labour manifesto. But they will not seek to depose Mr Blair, believing that a different leader would not necessarily adopt different policies.

Union officials believe the move marks an important change in strategy. One said: "The unions have been reluctant to flex their muscles. They still have clout ­ and 50 per cent of the votes at the annual conference ­ but they have always done deals with Blair. That may be about to change."

Some union leaders are angry ministers played down the importance of the public services forum. They were also irritated that Downing Street briefed a more hardline version to the press of Mr Blair's speech to a TUC dinner than he actually delivered.

Mark Seddon, a left-wing member of the NEC who will join the new group, said: "For the first time, support for a serious effort to reclaiming the Labour Party by the left is coming from trade union leaders, members and MPs."

John Reid, the Health Secretary, will try today to avert an embarrassing defeat at the Labour conference over the Government's plans for foundation hospitals. In a pamphlet published by the New Local Government Network, he will insist the plan is in line with the founding principles of the National Health Service.

Mr Reid will sayit is "time to abolish Clause 4" for public services, just as Mr Blair ended a "Clause 4" approach to the economy. He will argue that foundation hospitals will not break up the NHS, but inject "localism" into the service.