'Livid' unions threaten to snub Blair

Angry trade unions are threatening a bitter conference showdown with Tony Blair in a new row over private sector involvement in the public services.

They have vowed to block the election of Blair favourite Charles Clarke to a new role as party chairman if the Prime Minister refuses to budge on the issue.

Mr Clarke is due to be endorsed by this autumn's party conference. But his position requires a rule change and, short of detailed proposals on the scope of "creeping privatisation" to campaign against, some trade union members are prepared to mount a symbolic protest vote against him.

"We are livid about this. There will be a big row at conference. Unless they are prepared to sit down and start to talk about a deal there may be a lot of problems, not least over the supposed coronation of Mr Clarke as chairman of the party," a union source said.

Labour backbenchers and trade union leaders kept quiet about the surprise manifesto pledge to extend the use of private firms in delivering public services throughout the election campaign.

Though furious that they had never been discussed at policy forums or even in discussions, they waited until now to vent their anger.

A spokesman for the GMB union said: "They deliberately crossed the street to pick a fight with us in the election campaign and we turned the other cheek. Now they've done it again and we can't ignore it."

Neither did Mr Blair return to the House of Commons a conquering hero. At the Parliamentary Labour Party meeting last week, one MP described the mood as "sombre". "There will be a very different atmosphere and a very much more demanding party on the way to this year's conference," he said.

This week, the Trades Union Congress meets to agree its position after tensions flourished following a meeting between the unions and the Prime Minister at Downing Street. Some of the unions are determined to drum out any extension of the use of private firms in schools and hospitals, which could affect the pay and conditions of their members without necessarily improving the service.

But Tony Blair has made it clear he will not be knocked off course. "We stick by the policies we put forward at the election," he said last week.

At the Downing Street meeting, according to the trade unions, Mr Blair had been "keen to give broad assurances in terms of there being no wholesale privatisation". But a GMB spokesman said: "In terms of cast-iron assurances there had not been a lot forthcoming."

There was bitterness and division when John Monks, the TUC general secretary, adopted a conciliatory tone and said the air had been cleared.

But the biggest unions representing public sector workers, Unison, the T&GWU and the GMB, will take a much harder line. A spokesman for Unison said: "Our members have said very clearly they don't want to see any more creeping privatisation."

The TUC plan is to clear that up through a "social partnership" involving the Government, the trade unions and the private sector.

But TUC sources admittedconfrontation is now an option if they can't strike a deal. "They [the unions] are in a position where they can begin to call a few shots."