Ms Morris, together with four ex-ministers - including Angela Eagle, twin sister of education minister Maria - gave her support to a critical document on the proposed legislation. It said that setting up independent trust schools would lead to disadvantaged pupils becoming “losers rather than gainers”.

David Blunkett, another former education secretary, while not adding his name to the 50-plus signatories, is believed to have been involved in behind-the-scenes talks to broker a deal between disgruntled MPs and the Prime Minister.

The first sign of capitulation came on Tuesday when Jacqui Smith, schools minister, met one of the demands in their document, before it was even released. She announced a postponement of the publication of a new code on school admissions.

The rebel MPs have called for the code to be made statutory. On Radio 4‘s Today programme, Ms Smith said the code would be considered alongside the proposals in the white paper. She said there should be some freedom for schools to set their own admission criteria, but there should not be a “free-for-all” or selection by ability.

The group makes several recommendations, including abandoning the proposed schools commissioner post, described as “an expensive new bureaucracy”, and calls for the creation of new community schools.

The MPs recommend that local authorities be given the power to stop schools expanding and to intervene if concerned about any publicly-funded school’s performance, including an academy. They also want inspections of local authorities to be tightened up.

The trust school concept should be further debated and developed before any legislation, the paper argues. It says the idea is based on the US charter school model, which it says has failed poorer, more vulnerable families.

Baroness Morris, who left the Cabinet in 2002, said: “Show me a school which has changed its admission policy to attract more children from poor backgrounds with unco-operative parents.

“When schools change their admissions policy it is to attract more able children or a better-balanced intake.”

John Denham, former Home Office minister, rejected the “alternative white paper” tag given to the document. MPs who had signed up to it welcomed the majority of the Government’s proposals. But he said: “Our concerns have been that some of the reforms put together could be counter-productive, worsening the position of the most disadvantaged pupils.”

Tory leader David Cameron last week embarrassed the Prime Minister by offering provisional support for the Bill due next year.

But Tony Blair will not want to have to rely on Conservative votes to push through this key legislation. He told Parliament that the white paper proposals were the “right changes to make”.

This week, the National Confederation of Parent Teacher Associations and the National Association of School Governors told MPs that many parents would not want to become more involved in running schools.

The General Teaching Council said the Government’s proposals could leave disadvantaged pupils further behind and do not address special needs provision.

The British Humanist Association said it believes trust schools would be an easy route for religious sponsors to take over community schools creating segregation and sectarianism.