Labour Party to set out its vision for public services in a new 'Clause IV'

Tony Blair is to launch a new "Clause IV" debate to modernise Labour's policies on public services in an attempt to heal the party's wounds over his controversial school reforms.

The Prime Minister acknowledged the need for a more inclusive debate inside the Labour Party a day after a rebellion by 52 of his MPs forced him to rely on Opposition support to win a crucial Commons vote on his Education Bill.

Speaking in his Sedgefield constituency last night, Mr Blair said: "Ten years ago, the Labour Party debated the new Clause IV modernising our aims and values. I believe we now need to return to the debate but in a more practical and concrete form.''

A campaign called Building a Progressive Future will be launched by Mr Blair after the May local elections to shape Labour policies for the next 10 years. He wants to include critics of his education policies such as the think-tank Compass and "outsiders" such as frontline public sector workers who are not party members.

Allies said the Prime Minister wanted to learn lessons from the education row, but he was confident of winning the argument for his vision of modern public services which promoted diversity in provision and ensured the least well-off were given advice on taking advantage of the new choices.

Mr Blair is anxious to redraw the dividing lines between Labour and the Tories, which have been obscured by the Opposition's support for his school reforms.

He said: "The reason I advocate change is not because I want to provoke party division, still less because I see myself as Ramsay MacBlair betraying the Labour Party's values or seeking my so-called legacy. But because one way or the other, any government will have to meet these challenges in today's world. That is the pattern of the future that we can't alter.

"What we can do is ensure that it is progressive values of fairness and social justice that govern this future, not those of the Conservative Party that would take our nation backwards. It's not about me. It's about us and about our country."

Mr Blair hopes the policy review will lay the foundations for Labour's programme for a fourth term. "It is a question of changing the world according to our lights so that it cannot changed according to theirs [the Tories']. To seek to only protect what we have is to risk losing it," he said. "The test is this: what does the change mean, when all the argument is said and done, for ordinary people? This is the very core of New Labour - always pursue the values of solidarity and equity but never be Conservative about your means. Unchanging on the why, but flexible on the how."