MINISTERS still hope to introduce legislation before Christmas to allow private firms to run schools - despite the delay in publishing their White Paper.

As the Government tried to quell concerns about privatisation - while stressing it would not back down - and unions and backbenchers flexed their muscles, the much-touted White Paper was put back to September.

Education Secretary Estelle Morris said she wanted to avoid accusations that she was trying to slip out controversial proposals just as teachers left for their summer break.

But ministers are believed to be rethinking parts of the privatisation package, cooling on some of its more contentious ideas, while the riots in Bradford and Oldham have raised questions about creating new faith schools - another part of the paper.

Department for Education and Skills officials admitted the extra time would be used to hone the arguments for allowing the private sector to take over schools and local authorities.

Plans for a shake-up of school inspections have also been delayed because the Office for Standards in Education wanted the DFES paper to come out first to prepare the ground. Both are in part victims of the postponement of the general election which left too little time before schools broke up.

Even Nord Anglia, one of the leading education companies, this week joined the chorus of critics, saying a proposal to give businesses control of governing bodies would blur accountability. Kevin McNeany, the company’s chairman, said governors should instead be allowed to hire firms at arm’s length.

“We prefer the distance that a robust contract would give us,” he said. “That way it’s simple. We can sign a contract saying this is what we are going to do. If we don’t do it, then sack us.”

Tony Blair this week praised public services as symbolising the “spirit of community”.

Just as Britain celebrated business entrepreneurs in the 1980s, it should now celebrate the “social entrepreneurs who turn their ideas into successful schools”, he said.

But he indicated no watering down of his planned role for the private sector, and in particular defended the much-criticised Private Finance Initiative which is increasingly being used to build new schools and hospitals. That prompted an angry response from unions and the GMB withdrew pound;1 million funding from the Labour party.

Ms Morris, meanwhile, was emphasising that the private sector was not the only way of raising standards. She repeated that successful schools will be the innovators who produce the next wave of improvement - and to that end, the DFES this week launched a Schools Innovation Unit.

It will draw on the work of schools and teachers to spread “fresh thinking”. The DFES called it “a one-stop-shop for headteachers looking for radical new ways to deliver higher standards”.

Ministers were saying in written answers in Parliament as late as last week that the White Paper would come out this month. A leaflet sent to teachers across the country with the DFES’s Teachers magazine promised a “short summary” would arrive in schools mid-July.

The department’s Permanent Secretary, David Normington, was saved from having to give a speech to education officials at the Society of Education Officers’ conference last weekend, without revealing the delay, when a newspaper that morning broke the news.

He said he had been wondering how he could do it honestly.