The speech will seek to highlight the domestic agenda

The prime minister said Labour's aim was "excellence for everyone, whatever their background", in a keynote speech to the left-wing Fabian Society in London.

He said that if Labour failed to reform the public services "then one day the right will come back and demolish the very ethos on which they are built".

The restating of the New Labour agenda comes amid continuing rows over last week's cabinet reshuffle and the decision to go to war with Iraq.

The prime minister's speech prompted Conservative Party chairman Theresa May to say: "This is the ninth time that Tony Blair has relaunched his government in this kind of way.

"Whenever he is in deep political trouble - as he is today after his botched Cabinet reshuffle - he resorts to this desperate tactic."

Meanwhile Unison boss Dave Prentis said he was behind plans to improve public services but that he parted company with the government when it came to private sector involvement.

"All the evidence shows that the use of private companies is not a model for improving public services."

The prime minister has effectively been summoned to the Commons by Speaker Michael Martin to make an unprecedented statement on Wednesday to explain the consequences of his constitutional reform plans.

Patients, pupils and passengers don't want to hear vague statements about reform Liberal Democrat parliamentary chairman Mark Oaten

The Conservatives used an opposition debate on Tuesday to raise further questions about Mr Blair's controversial reforms, which include plans to scrap the post of lord chancellor and create a supreme court.

Shadow leader of the Commons Eric Forth branded the reshuffle a "shambles".

He mocked the confusion in government, saying Downing Street had announced the post of lord chancellor and the Wales and Scotland Offices had been abolished but then rowed back from that position.

But newly promoted Commons leader Peter Hain hit back at the Tories, accusing them of wanting to stay in a past rooted in privilege.

Mr Forth was "frightened at the fact that reform and modernisation of our democratic system is popular right across the country", claimed Mr Hain.

"Every time this Labour government proposes a sensible constitutional reform widely supported by informed opinion in the country at large the Tories oppose it, every time they claim the end of the world is nigh."

The war with Iraq remains firmly on the political agenda with two former cabinet ministers - Robin Cook and Clare Short - hitting out at the way the government presented what it said was evidence of Saddam Hussein's capacity to launch weapons of mass destruction.

Two tier system

In his speech Mr Blair set out his government's achievements such as the New Deal, the independence of Bank of England, low unemployment and low interests rates.

And he attacked the Conservatives for pursuing cuts, relying too much on the private sector and for their economic record.

But he warned that Labour and the unions were in danger of defending public services instead of pushing for more "radical" reforms.

He queried whether the 1945 model for the NHS was relevant in the 21st century.

He warned the current system often delivers a "two-tier" service, with better health care and schooling available to those educated and confident enough to work the system to their advantage or wealthy enough to buy their way out.

Size of wallet?

Strong public services drove equality which was why reform was so crucial, he argued.

The Tories offered choice to those who could pay for it but "it is your citizenship not your wallet that entitles you to decent public services", said Mr Blair.

The prime minister's speech came as the public sector union Unison debated its opposition to privatisation in the public sector at its annual conference in Brighton.

Meanwhile, Liberal Democrat parliamentary chairman Mark Oaten said: "Patients, pupils and passengers don't want to hear vague statements about reform.

"They deserve to see delivery in local schools, hospitals and public transport."