TONY Blair is now so weakened that he is desperate to appease trade union bosses, a leading Conservative shadow Cabinet minister and Suffolk MP warned over the weekend.

TONY Blair is now so weakened that he is desperate to appease trade union bosses, a leading Conservative shadow Cabinet minister and Suffolk MP warned over the weekend.

Tim Yeo told said the unions would seize on the Prime Minister's drop in popularity to regain their influence on Labour policy.

Mr Yeo, MP for Suffolk South and shadow trade and industry secretary, said Labour was split down the middle over the war on Iraq, the euro, foundation hospitals and university tuition fees and had suffered a summer of airline and Post Office strikes.

Speaking to a meeting of Conservative activists on the eve of the TUC's annual conference, he claimed: "The effect of all these troubles is to so weaken Tony Blair that he is forced to turn to the very people he once shunned.

"He has been reduced to 'beer and sandwiches' with his union paymasters, at the expense of real reform of our public services. The truth . . . is simple. This Prime Minister is now desperately short of friends."

Mr Yeo said the establishment of a Public Services Forum by the TUC, which will act as a consultation body on public services, showed Mr Blair's need to acquiesce to the unions.

"This is New Labour at neither its best nor its boldest," he said, mocking the Prime Minister's speech to the Labour Party conference last year. "Union leaders have understandably seized on Tony Blair's weakness. Short of influence, marginalised in both perception and reality since the reforms of the 1980s, they now sense a fresh opportunity."

Mr Yeo said more than 600,000 manufacturing jobs had been lost since Labour came to power and British firms were now moving operations abroad.

"These worrying trends are the inevitable consequence of six years when taxes have risen, red tape has got worse, the skills gap has widened and Britain's infrastructure – in particular our transport system – has begun to resemble the third world.

"It is depressing that instead of working together to drive through the real reforms of the public services and responding to the increasingly intensive international competition for jobs, union leaders and ministers are locked in discussions about the politics of who sits where in what forum."

Tony Blair should resign over the death of weapons expert Dr David Kelly, according to a YouGov poll for The Mail on Sunday. It found the revelations thrown up by the Hutton Inquiry have damaged the Prime Minister, with 43% of voters believing he should quit, compared with 37% before the hearing opened.