Tony Blair is expected to summon trade union leaders to Downing Street in an attempt to allay fears about the Government's plans for greater private sector involvement in the public services, it emerged last night.

Downing Street would not confirm that talks with key union general secretaries had been arranged for tomorrow, but the Prime Minister's official spokesman said that he did want to speak to them directly.

"He does believe it is important that there is a dialogue with the unions," he said. "I am sure he would want to listen in future and ensure that he meets the union leaders and speaks to them face to face."

Earlier, ministers were accused of "panicking" in the face of a growing tide of concern within the Labour movement - among both unions and backbenchers - at the implications of the proposals for greater private sector involvement set out in Labour's election manifesto.

Downing Street insisted they were not considering the "wholesale privatisation" of public services, while Health Secretary Alan Milburn said there would be clear limits to private sector involvement in the NHS.

"Although there has got to be a different relationship with the private sector, and we have got to use the private sector where that's appropriate, providing they can bring something to the table, there have got to be some clear boundaries around that and there are," he said.

"Most importantly, reform within the public services and certainly within the NHS has to come from within."

The latest wave of concern was triggered by a warning from the centre-left think tank, the Institute for Public Policy Research, that Labour's election promises to modernise services such as health and education could be undermined by flawed public-private partnership schemes.