The TUC annual conference kicked-off on Monday with a warning that further private sector involvement in schools and hospitals would be "morally wrong".

Speaking as the TUC congress opened, Bill Morris said it would be possible to reform public services without greater involvement of the private sector.

"The quality of our public services defines not just the quality of our lives but also the moral state of our nation," he said.

"We need to acknowledge that a society which largely depends on the private sector to deliver public services would be a very different kind of society from that which is required to create equality and social justice. It would be a society in which the priority was shareholder value rather than social need.''

As opposition to Labour's plans intensifies, the GMB chief John Edmonds warned that the policy could "crack the foundations of the Labour Party".

John Monks warned that the government's plans will put intense strain on trade unions' relations with Labour.

"We've got to get behind the modernisation of public services in this country, start spending money on public services... we've got a lot to do and I want to do it together with the government," he said.

Monks has said Labour must safeguard the rights of public sector workers transferred to private firms.

Labour's plans were dealt a blow on Monday after a MORI survey revealed that one in five Labour voters would turn their backs on Tony Blair if he carried through his plans.

Patricia Hewitt, the trade secretary, received a luke warm response after addressing the conference to flesh out new plans to protect public sector workers' rights when they are transferred to the private sector.

Hewitt attempted to defuse a row over fat cat pay after it emerged that the outgoing bosses of the troubled electronics firm Marconi were set for £1 million bonus payments. She said she wants big payouts for success but no payouts for failure in industry.

As tensions mounted over the weekend, Dave Prentis, the Unison chief, threatened strike action if the government went ahead with its plans to bring the pribate sector into schools and hospitals.

"Our experience is they lead to less responsive services, less accountable services, lead to fragmentation and you do not get value for money," he said.