There were signs Labour rebels were preparing to retreat and save Tony Blair's premiership, after the Government's Education Bill was published yesterday.

The Prime Minister could be set for a major victory as Labour MPs and senior party figures previously opposing planned school reforms indicated a willingness to change.

The legislation published included compromises with rebel MPs including a ban on schools interviewing parents, and legal ban on selecting pupils by academic ability.

But Ministers refused to cave to demands to abolish the Education Secretary's right to stop councils opening schools.

She will retain a veto on local authorities, allowing her to insist that an independent trust run new schools instead.

About 100 Labour MPs and senior party figures had attacked the plans in recent months, warning that more independence for schools would lead to a two-tier system in which children from poor homes are condemned to the worst comprehensives.

But last night one of the rebels, Geoffrey Robinson (Lab Coventry North East), said: "I think there is enough there for us to reach agreement with the Government in due course.

"I think the Government will get it through without needing the support of the Tories."

Barry Sheerman, who chairs the Commons Education Committee which savaged the White Paper, said many Labour colleagues had been won over by the answers given to key questions. ..SUPL: