Tony Blair is set to apologise to trade union bosses over his handling of controversial proposals to give the private sector a greater role in the provision public services, reveals the Observer.

After warnings of a bumpy ride at both the TUC and Labour conferences, the prime minister will use a keynote speech to delegates in Brighton in a bid to defuse the "privatisation" row and will concede that the government could have handled the flagship policy better.

The Observer reports that the PM will seek to dispel widespread "anxiety and anger" among trade unionists that public private partnerships will see doctors, teachers and other public sector staff being moved into the private sector.

But Blair will continue to defend the "ideology" of PPP and argue that Labour will press ahead to strike the best deals for public service users.

Downing street is also set to hold a series of secret meetings with union leaders in a bid to avert embarrassing defeats at Labour's conference in October.