Blair faces second rebellion with Tube privatisation plan

Tony Blair shrugged off a growing rebellion by Labour MPs yesterday when the Government announced it was pushing ahead with its controversial plan for a part-privatisation of London Underground.

The Cabinet's decision sparked an immediate revolt by 55 Labour MPs from the London area. Mr Blair told the Cabinet he would not back down from "tough decisions" over his plans to ensure greater private sector involvement to improve public services. He said: "If you want the ends, you have to face up to the means."

Stephen Byers, the Secretary of State for Transport, defied criticism from Ken Livingstone, the Mayor of London, and Bob Kiley, the London transport commissioner, when he told Parliament he would proceed with the scheme. Mr Byers said the plans for a "publicly run, privately built" Tube network would unlock £13bn of much-needed investment to modernise the network over the next 15 years.

He vehemently denied that the project amounted to privatisation and promised that safety would be put at the heart of revised contracts with the private firms.

The Government was accused of a U-turn last night after ministers were forced to backtrack over their plan to impose MoT-style tests on millions of disabled people.

In an attempt to head off a growing rebellion by Labour MPs, Robin Cook, the Leader of the Commons, made clear that the 2.3 million people already receiving incapacity benefit would not be subjected to medical tests. Only new claimants would be subject to reviews of their condition.

His statement, which surprised many Labour MPs, came as they stepped up their attacks on the attempt to cut the £7bn-a-year bill for incapacity benefit. Downing Street denied a U-turn, insisting ministers had always intended the changes would not affect existing claimants. Ministers admitted there was a need to "explain" the proposals better in the face of a hail of criticism from disability groups as well as Labour MPs.