Tony Blair has come under attack from union leaders for developing an alliance with Italy's Silvio Berlusconi around promoting economic liberalisation in the EU.

The TUC said: "We have made it very clear to the government that we are unhappy with the document [on liberalisation] signed with Silvio Berlusconi. We await a response."

Gordon Brown yesterday set out the government's position on EU economic reform, calling for an overhaul of the way state aid is dealt with and attacking the common agricultural policy as a "substantial burden on the EU economy".