By Mark Davies BBC News Online political reporter

Tony Blair has avoided a clash with left-wingers and union leaders over the involvement of private companies in public services.

The prime minister succeeded in persuading a meeting of the party's national executive committee to refer the matter to Labour's policy forum.

The meeting on Tuesday came amid growing discontent on a range of issues on the Labour benches in the Commons.

Seddon: Concern over private involvement

A motion had been placed before the meeting calling on the government to "halt any future moves towards the privatisation, partial or otherwise, of our public services".

It was lodged in the name of Mark Seddon, editor of the leftwing Tribune newspaper and seconded by Mary Turner of the GMB union.

Mr Seddon said before the meeting that the motion could not change government policy, but passing it would indicate the level of concern about such plans.

There is considerable union backing for the move, particularly on a day of more grim headlines over threats to jobs.

Mr Seddon said: "Private finance is a very expensive way of funding public services. The real beneficiaries at the end of it tend to be the private companies themselves."

'Yellow card'

Mr Seddon said later that the motion was referred to the party's policy forum at the personal intervention of Mr Blair.

The meeting of Labour's National Executive Committee came amid mounting concern among the party's backbench MPs on a range of issues.

One MP said on Monday that backbenchers were showing the Labour leader a "yellow card" over the government's performance.

There is anger over Transport Secretary Stephen Byers perceived U-turn over Railtrack and the prospect of thousands of jobs going at Consignia.

The threat of action against Iraq, the dangers to UK troops in Afghanistan and Mr Blair's friendship with right-wing Italian Prime Minister Silvio Berlusconi are further causes for concern.

Norwich North Labour MP Dr Ian Gibson said Mr Blair's future leadership was being questioned.

Challenge

Former minister Peter Kilfoyle, an increasingly vocal critic of the government, said ministers were failing to listen to backbenchers.

There is even talk in the Commons tearooms of a "stalking horse" challenger to the prime minister.

Mr Blair will seek to calm the growing discontent when he faces Labour MPs at a meeting of the parliamentary party on 10 April.

He has said in the past that he is used to seeing headlines about the government facing "its worst week" since taking power and that those apparent crises were tackled.

This time round it is difficult to argue that with such deep-rooted concerns, it will be as easy to shake off.