As Labour's Blackpool conference concludes, backbench MPs have urged the prime minister to acknowledge their concerns about the direction of his public service reforms.

But as Tony Blair made clear in his address on Tuesday, he is not prepared for his party to "abandon our journey of modernisation".

And the conference also heard Bill Clinton's passionate call to "meet the challenge of the new millennium" and stick with the Third Way he pioneered in America.

But despite that, Monday's defeat for the Labour leadership on use of the private finance initiative (PFI) pointed to unease at the direction of the party.

However, as party chiefs were keen to point out, while 92 per cent of the union vote supported the anti-PFI stance, 58 per cent of constituency Labour parties backed the government's position.

It provided ministers with just about enough justification to claim that local people want investment in new schools and hospitals no matter where the cash comes from.

But that move only served to highlight the fact that the party leadership feels able to ignore the conference's decisions whenever it thinks it needs to.

While some critics expressed concern at a New Labour leadership taking the party in a direction opposed by the much of the grassroots membership, others point out that ignoring conference decisions is not a new development.

"There's nothing new in the Labour government or Labour leadership ignoring conference," backbencher Andrew MacKinlay told ePolitix.com.

"I think that [ministers] need to be sensitive to the views of the party," he said, noting that on the "overwhelming majority of issues there is complete agreement" between the conference and the government.

"But you will get areas of conflict and that's the nature of British politics. Whilst I'm often on the side which feels aggrieved about this, because I tend to agree with conference, I don't shout 'foul'. I think that is just the way things are," MacKinlay said.

"What I would say though is that I think the government needs to listen more to the Labour members of parliament who really do touch base, they're the best focus group."

And on the Blackpool fringe, some MPs were prepared to echo the concerns of unions about use of the PFI and the direction of the party under Tony Blair.

A meeting of the Socialist Campaign Group, which has 29 MPs among its membership, heard one backbencher suggest that the Labour leader would be more at home in the Conservative Party.

And others also expressed alarm and concern at the privatisation of state responsibilities, predicting that public opinion could eventually force the government to backtrack on its plans.

Hornchurch MP John Cryer said only the "most loony, goggle-eyed right winger" still supported privatisation.

"There has been a huge watershed against privatisation and I think a massive shift in public opinion," he told the fringe meeting on Tuesday.

Cryer criticised ministers who, despite the shift in public opinion, were "ploughing on with the absurd idea" of privatisation.

Fellow MP David Taylor also said he was "dismayed and astonished at the readiness of our government to prod and coerce public bodies, public agencies, local government particularly down the PFI and PPP route".

In the medium term such projects would cost more and prove inflexible, he argued.

"PFI is prohibitive in cost, flawed in concept and it is intolerable in consequence to the taxpayers, the citizens and the workers that look to us to defend their interests," said the North West Leicestershire MP.

The Socialist Campaign Group meeting also heard MP Kelvin Hopkins argue that the conference defeat for the leadership "was the culmination of the pressure of public opinion on the party and the government".And he said the logic of some in New Labour is that "the world is better run by markets than by governments".

"Democracy is effectively being undermined by progressive privatisation of the whole economy... governments were elected, were created in the first instance, to actually have control of their economies," said the Luton North MP.

"What purpose is there for a democracy when you privatise what's left?

"Democracy becomes meaningless and in the end it will be working people who will suffer, and in the end will suffer not just from bad services but from poverty as well."

That theme was taken up by Hayes and Harlington backbencher John McDonnell.

"This government knows the value of nothing and the price of everything," he said.

Of the PFI process he added: "I just don't know what you have to do to explain to the Labour leadership that this isn't working, it is just not working. And no matter how much they tweak the system it does not work."

He called for a "rational debate" on the PFI concept and said the prime minister's approach was "dangerous".

Plans to reform public services around the individual as consumer were not part of the socialist tradition, said McDonnell.

"We [socialists] saw individuals coming together as a society... Tony Blair is not of that tradition, we should face up to it now, he never was and - unless there is a Road to Damascus conversion - he never will be.

"He stands in the perfectly legitimate, perfectly appropriate for him, tradition of that liberal Whig High Tory tradition of the Victorian period that went on throughout the last century."

He told his audience: "What our job now is, is to say 'look, Tony, you are a Tory. I'm sorry, you are'. I'm not being derogatory about this. The philosophy of this is no different to what Thatcher was saying in the early 1980s."

He said Tony Blair's vision of an "enabling state" was one that simply collected taxes and passed it on to the private sector.

"It's something that we have to almost shout out loud about. We are not consumers, we are citizens... we are not individuals, we are members of a community," said McDonnell.

However the prime minister made it clear to the conference that he was not prepared to back down on his vision of public services becoming focussed on individual needs rather than around the concept of monolithic organisation.

"This isn't the betrayal of public services. It's their renewal," Blair argued.

So as delegates, MPs and ministers leave Blackpool they can have no doubts about the prime minister's determination to continue Labour's occupation of the centre ground of British politics.

But at the same time many Labour members are also finding a louder voice with which to express their opposition to that occupation.