I will not flinch, no matter how much the opposition

Tony Blair

He dismissed as "a lot of nonsense" much of the debate over using private companies - which was not a panacea but only one part of reform.

'Fat cat' advert

The GMB union, which is considering a cut in the amount of cash it gives to Labour Party coffers, said it was launching a �250,000 advertising campaign criticising the proposals.

A newspaper advertisement on Tuesday will portray a nurse and a "fat cat" businessman under the slogan: "Who do you trust to run public services?"

Edmonds: "Front door" privatisation warning

GMB general secretary John Edmonds said Mr Blair had used "warm words" until he had come to the "hard policy issues".

"We are not looking at backdoor privatisation but facing the prospect of ministers kicking down the front door and hurling privatisation onto the mat," he said.

The government looks on course for a confrontation on the issue at Labour's annual conference in the autumn.

Mr Edmonds says there will be a "substantial political row" unless a solution is found.

Crusade for change

The speech was dubbed as a "route map" for reform but went no further in giving firm details of the change plans.

Mr Blair called reform of public services a "crusade" and pledged to match the "zeal and commitment" shown by Clement Attlee's government when it established the welfare state.

He acknowledged there would be opposition to change, with critics using the spectre of rail privatisation to frighten people.

"I give a commitment and I give a warning too," he said.

It is a shame that the prime minister continues his romance with the private sector

Dave Prentis Unison

"The commitment is that I will not flinch from making the changes that are necessary to deliver better public services, no matter how much opposition...

"But my warning is equally clear.

"If we who believe in public services don't change them for the better there is an alternative political position that will seize on our weakness and use it to dismantle the very notion of public services as we know them.

"It really is, I believe, reform or bust."

He offered public servants a "genuine partnership" in making changes but insisted "there will be no vetoes".

Union fears

Mr Blair used the speech to reassure public service workers that the government was open to dialogue while at the same time showing he was ready to take on some union leaders.

Those leaders went to Downing Street last month for a "clear-the-air" summit to try to ease their fears over the reforms proposed during the election by Mr Blair.

Dave Prentis, general secretary of public service union Unison, said: "It is a shame that the prime minister does not listen to us, the people in the front line of public service delivery, but rather continues his romance with the private sector."

The lack of detail on the plans was criticised by TUC general secretary John Monks, who said public sector workers were worried by the many "unanswered questions".

"If you are starting on a crusade to improve public services, you want all the support of all the staff on your side and the danger is that they are offside," he said.

A different message came from the Manufacturing, Science and Finance (MSF) union, which welcomed the speech and urged other unions not to give a "kneejerk" reaction.