A motion tabled at next week's Trades Union Congress annual conference describes Labour's private sector involvement in education as "undistinguished" and threatens a possible national demonstration in support of public services.
It comes as this week's White Paper proposes that companies be given powers to take over failing schools. The motion was drafted following lobbying within the TUC by the National Union of Teachers and the National Association of Schoolmasters Union of Women Teachers. It is likely to herald a rough ride for Tony Blair at next month's Labour conference next month.
The motion claims that firms brought in to manage struggling schools have been bolstered by "enormous" amounts of public funding and that privatised education services in some councils have been criticised by the Office for Standards in Education.
It also highlights companies' lukewarm support for the education action zone initiative, which aimed to use private expertise and sponsorship to invigorate inner-city education.
By contrast, the motion says, ministers should have more confidence in their own efforts to improve schools without private intervention. Exam and test results have improved consistently, while 700 "failing" schools have been turned round without private involvement.
The motion, put forward by public services union Unison, covers the whole of the Government's approach to involving the private sector in public services. It attacks "creeping privatisation" in the National Health Service, and the use of the Private Finance Initiative to fund public building projects.
An independent think-tank this week added its voice to the criticism of privatisation by questioning whether companies could solve the problems of failing local authorities.
The Social Market Foundation said companies were unlikely to clear up the most fundamental problems in struggling LEAs, such as poor political leadership. In addition, over-complicated and confusing contracts had made the firms' job harder.
It said the Government's move to get companies involved in running schools was "hasty".
Cambridge Education Associates, which runs most services in the London Borough of Islington, was recently fined pound;320,000 for not meeting GCSE targets.
In Hackney, where Nord Anglia runs several services, the Government is now looking to hand education over to an independent, not-for-profit trust.