Tony Blair is to set out further plans to reform the public services when he returns from holiday.

The prime minister is expected to use his speech to Labour's annual conference next month to map out a strong "forward agenda" to show that the government has not run out of steam. 

But John McDonnell, chairman of the Socialist Campaign Group of Labour MPs, said: "There are signs within the trade unions, and even within the party's declining membership, of a grim determination to fight back."