Number 10 has denied the prime minister and the chancellor are at odds over tax policy.

Downing Street rejected claims on Monday of a new rift between the two most powerful men in the government.

The claims followed an interview in the Times in which the prime minister indicated that he will oppose moves to raise taxes.

"You have...got to make sure that you remain competitive in your economy, including on the levels of taxation," he told the newspaper.

But suggestions that his amounted to a warning to the chancellor were strongly denied.

"The prime minister fully supports the chancellor and they are fully in agreement in terms of policy," said the official spokesman.

There was also a denial that Tony Blair had ruled out the introduction of identity cards.

"The prime minister spelt out his view at the party conference; he said it was an idea that had to be seriously examined," said the spokesman.

"It is better to let that examination take place before pre-empting the conclusion. It's a very complex area."

The prime minister also told the Times that Labour is now "the only serious show in town".

Blair emphasised that there would be no retreat from his mission to reform public services.

"We have got a huge opportunity now because if we handle ourselves in the right way we are the only serious option, the only serious show in town," he said.

And the prime minister dismissed union opposition to reforms such as university top-up fees and foundation hospitals.

"The truth is that the unions don't run the show," Blair said.

But the prime minister also revealed some changes are being considered to plans for top-up fees in a bid to win over sceptical MPs.

On Iraq, the prime minister defended taking Britain to war as "the right decision".

"There is no decision more weighty than sending people into war, and you should never do it unless you believe it is right, and I believed it was right then and I still believe it was right."

And Blair also ruled out a referendum on the proposed European Union constitution.

He would not allow the government to be "convulsed for months" when it had a huge domestic agenda to focus on.