Blair claims that devolution has cemented Union

Tony Blair rebuffed John Prescott's demands for the creation of regional assemblies in England yesterday as he set out Labour's claims to be the true patriotic party of Britain.

The Prime Minister argued that devolution had helped to cement the unity of the United Kingdom as he sought to rebut Tory charges that setting up the Scottish Parliament and Welsh Assembly threatened to break up the union.

In a speech in London, Mr Blair said that "more decentralisation in England makes sense". But he referred only to the creation of mayors in English cities and made no mention of Labour's 1997 election manifesto pledge to set up elected regional assemblies in areas where there was "popular consent" for them.

Mr Prescott, Secretary of State for the Environment, Transport and the Regions, is pressing for action in areas such as the North East where there is demand for a regional government. While Downing Street denied any change of policy by Mr Blair, his speech reflected his cooling towards further constitutional upheaval.

His speech on "Britishness" put the issue of nationalism firmly on the agenda for the next general election and was an attempt to prevent the Tories playing the patriotic card. Mr Blair said: "True Britishness lies in our values, not unchanging institutions. The constitutional changes we have made and a new attitude of engagement with Europe are not a threat to British identity but on the contrary are the means of strengthening it for today's world."

He dismissed Tory opposition to Labour's constitutional changes as "sentimental nostalgia" and attacked William Hague's plan to allow English MPs at Westminster to vote only on laws that affect England and not those affecting Scotland and Wales. "The rest of Britain's MPs would, in effect, become second class citizens in the UK Parliament," he said.

Mr Blair added: "On Europe, standing up for Britain does not mean being anti-Europe. It is not pro-British to be anti-Europe... Standing up for Britain means fighting for British values."

The Prime Minister argued that "blood alone does not define our national identity" and said it was the "rich mix" of all different ethnic and religious origins over the centuries that had created a modern Britain. "Standing up for our country means standing up for what we believe in ... it means standing up for the core British values of fair play, creativity, tolerance and an outward looking approach to the world." It did not mean resistance to change nor "railing against the outside world". Mr Blair stressed his belief in the union, saying: "The United Kingdom is stronger together than apart."

But the speech was ridiculed by Mr Hague, the Tory leader, who said the claim that Labour was the party of Britain flew in the face of the Government's actions. "Tony Blair talks about Britishness. But the fact is that he's a man who is embarrassed about being British. He doesn't like our traditions, our institutions, our culture, our currency, our freedoms or our independence, and he is trying to get rid of them all," he said.

"Abroad he conspires to sell out the British national interest by scheming to scrap the pound and by refusing to stand firm against the drift towards a European superstate."