A Birmingham Labour MP has launched a broadside against Gordon Brown's handling of the economy, while a leading Blairite announced he might challenge the Chancellor for the leadership.
Birmingham MP Gisela Stuart (Lab Edgbaston) warned that "excessive public spending, rising taxes and excessive micro-management" were threatening Britain's prosperity.
Alan Milburn, the former Health Secretary, said he would not rule out challenging Gordon Brown for the leadership of the Labour Party.
Their comments were the latest sign of a fightback by MPs loyal to Tony Blair as pressure grows on the Prime Minister to stand down.
It is widely assumed Mr Brown will become Labour leader once Mr Blair quits Downing Street, but Blairite MPs are becoming increasingly vocal in their criticisms of the Chancellor.
In a speech at the German Embassy in London, Ms Stuart, a former Health Minister, said governments on the Continent had damaged their economies by taxing and spending too much.
She continued: "There is a similar danger in Britain today: excessive public spending, rising taxes and excessive micro-management are gradually making Britain more 'European' if I may use the word in that pejorative sense.
"And there are some worrying signs that in a desire to re-position the Conservative Party, David Cameron is joining an unhealthy consensus on a range of issues that will result in continued drift for Britain's economy.
"In a phrase once used by John Major in a very different context, it's time to "get back to basics" on economic policies, not only in Germany and Britain, but throughout most of the EU."
She added: "Entrepreneurs only thrive in certain conditions . . . this does not include high rates of tax and excessive public spending by the state."
Mr Milburn recently launched an attack on Mr Brown's tax plans, warning they were penalising hard-working families while former Transport Secretary Stephen Byers criticised the Chancellor over pension credits.
Former deputy Labour leader Roy Hattersley warned this weekend that the current in-fighting was the worst the party had seen in 50 years.
Lord Hattersley, who was MP for Sparkbrook in Birmingham, said it was ruining the party and damaging stories would continue until Mr Blair announced his departure date.
He said "I've never known a time when the in-fighting in the Labour Party was so bitter.
"I don't think it is Brown and Blair, I think they've got too much sense. But their supporters are really ruining the Labour Party."
John Reid, the current Defence Secretary, is also known to be an opponent of the Chancellor.
The conflict dates back to Dr Reid's time as Health Secretary, when Mr Brown forced Downing Street to water down plans to reform hospitals.
The Chancellor's key lieutenants include Ian Austin, the Labour MP for Dudley North.
Blairites have accused the Chancellor of trying to hurry Mr Blair's departure - by withdrawing a #200 council tax subsidy for pensioners so that the party does badly in the May 4 local elections.
For their part, the Brown camp have accused Mr Blair of remaining in Downing Street on as long as possible, to help rival leadership candidates such as Alan Milburn or David Miliband establish themselves.