Just like his pal Silvio

Tony Blair, assisted by a posse of unelected advisers, propaganda paid for by our taxes, and a subse

Tony Blair's friendship with Silvio Berlusconi is proof, if proof is still needed, that he hasn't a particle of social democratic principle left in his body. He has no qualms about scraping the friendship of an Italian government that includes "post-fascists" and the equally racist and unhinged separatists of the Northern League. Britain and Italy have united with Spain against the common enemy: the employment protections and social benefits of European workers. (Spain is doing well out of the deal, incidentally. It has been offered joint sovereignty over the inhabitants of Gibraltar as a present from an appreciative Foreign Office.)

After this, I find it hard to understand how anyone dares call Blair a centre-left politician, however fuzzy the concept of "left" has become. But many do - and miss in their complacency how Berlusconi is a model for the Italianisation of British politics. Blair's friendship with him shows how the democratic component of new Labour's social democracy has become as nugatory as its social aspirations.

The Italian prime minister is more sinister than his coalition partners. Fascism and the Northern League look back to the medieval Lombard state of Padania - even though it never actually existed - and dream of recreating it. Berlusconi is a new force that may represent a possible future. He is Europe's most powerful plutocratic populist, a politician who is free to deploy private and public resources to undermine democracy. He used his control of much of Italian television to win power. Once in office, the remaining state-controlled channels became his to manipulate, while his control of the legislature allowed him to amend the law to frustrate investigation into allegations that his companies provided the loot to bribe judges. Berlusconi's private interests allow him to control the state. The state protects his private interests. If there is a way out of the double lock Berlusconi has around the neck of Italy, the opposition has yet to find it.

In Britain, new Labour's most lasting constitutional innovation has been to accelerate trends begun under the Tories and make the state the helpmate of the private interests of a political faction. Attacks on Blair's misuse of public funds have concentrated on the explosion in the number of special advisers, and for good reason. There are now 80 of them and their role is explicitly political.

One of new Labour's first acts was to legitimise the transformation of special advisers into propagandists and enforcers. Barely had Blair wiped his feet on the Downing Street doormat in May 1997 than a new contract for special advisers was issued. The old clause prohibiting the use of "public funds" for "party political purposes" was dropped. Instead, the contract asserted that "the government needs to present its policies and achievements positively, in order to aid public understanding and so maximise the effectiveness of its policies, and that is a legitimate use of public funds and resources". Special advisers were also given the power to tell bovine backbenchers what to say and do on the grounds that "it would be damaging to the government's objectives if the government party took a different approach to that of the government itself, and the government will therefore need to liaise with the party to make sure that party publicity is factually accurate and consistent with government policy". In short, anything goes except scrutiny of special advisers by the eunuchs in parliament.

Beyond the paid party appointments lie the unpaid advisers in Blair's Forward Strategy Unit and elsewhere. They can afford to work gratis because they are, Berlusconi-style, fantastically wealthy. All Blair would reveal in response to questions from the Lib Dem MP Alan Beith were their names: Adair Turner, vice-president of the investment bank Merrill Lynch, which in May paid a $100m fine after an investigation by the New York attorney-general into its misleading of investors during the dotcom bubble; Arnab Banerji, chief investment officer of F&C Management, which describes itself as a "pan-European financial services conglomerate"; Penny Hughes, former president of Coca-Cola in the UK and a director of Vodafone and Trinity Mirror; Nick Lovegrove, a partner at the management consultancy McKinsey, where William Hague once worked; and the inimitable Lord Birt, who refused for tax reasons to become an employee of the BBC even though he was its director-general.

Not one of the above is a trade unionist or academic or think-tanker from any part of social democratic Britain. Blair refused to tell Beith what protections were in place to prevent conflicts of interest. His silence suggested there were none. Although we are not allowed to know what advice they give, I think it is safe to guess that they aren't recommending that a clean-up of fraud in the City is a priority after the stock market crash. Meanwhile, Lord Levy haunts the corridors of the Foreign Office. His poltergeist presence can also be spotted fleetingly in the background of every case of alleged sleaze since new Labour came to power. Once again, he isn't answerable to parliament or the media.

But however justified the targeting of special advisers by the government's critics, it creates a false dichotomy. On the one hand, there are new Labour's creatures, sponging off public funds and working for a partisan interest. On the other, there is the civil service, upright, independent and impartial.

If this happy picture of public officials was accurate, there would be little to worry about. We could relax with the comforting thought that civil servants vastly outnumber special advisers and provide a solid defence of honest government. Unfortunately, the prime function of the civil service is to obey orders. It will, to be sure, find excuses not to execute the orders of ministers it believes to be on the way out. It will also follow its own policies if a minister is lazy. But when a powerful government tells it what to do, it does it.

Political control has been formalised in the case of Alastair Campbell. He has become Britain's unelected propaganda minister. The force of the state power he can deploy in the regime's interest was well-illustrated by a brilliant Panorama investigation into how public money was used to secure new Labour's second term. The cost of government advertising has grown by 146 per cent since new Labour came to power. In the 2000-01 financial year, about half the advertising budget - £97m - was spent just before the election. Panorama showed convincingly that the propaganda was anything but a public service. An advert about benefit scrounging, for example, wasn't aimed at working-class viewers who might know and report incidents of frauds, but scheduled to appear in programmes watched by middle-class swing voters anxious to be reassured that new Labour was getting tough on the lower orders. Private polling and a computerised rapid-rebuttal system are also financed by the public and run by the civil service, despite the obvious partisan benefits they bring the governing party.

The Jo Moore affair taught us that it is career suicide for a civil servant to resist political pressure. She is alleged to have instructed Department of Transport civil servants to collect as much dirt as they could on Bob Kiley, Ken Livingstone's transport adviser, and a man who can run a railroad, unlike her then-boss, Stephen Byers. It simply wasn't open to them to shrug and reply that they couldn't organise a smear campaign. Instead, a war developed in the department, which claimed the careers of Byers, Moore and its chief press officer, Martin Sixsmith.

Conversely, Sir Richard Mottram, Byers's permanent secretary, admitted in evidence to the Commons that he couldn't discipline or fire a civil servant who was working in the interests of new Labour. If the civil servant's toadying had won the respect of ministers, he was untouchable.

For me, the most convincing evidence of the ease with which the civil servants can be corrupted comes from the conversations they have when they believe no one is listening. The Lib Dems used the Data Protection Act to retrieve e-mails about their spokesmen. When Whitehall talked to itself, there was no pretence that an impartial civil service should strive to give factually accurate answers to a sovereign parliament.

In notes discussing how to answer questions from Matthew Taylor, the Lib Dem treasury spokesman, civil servants wrote: "Matthew Taylor is a tricky customer"; "I have gone for the narrow and perdantic [sic] interpretation of Taylor's [question], which makes the answer pretty short and easy"; and "It is possible to speculate on the reasoning behind Mr Taylor's questions but there is no firm evidence of what he is seeking to achieve or what use he might make of the answers."

Civil servants in the Department for Education said of Phil Willis, the Lib Dem education spokesman: "I would ask you to be particularly alert to PQs put down by Phil Willis"; "Willis has put down two questions which are clearly designed to seek similar information. Fortunately, he has drafted them wrongly and we shall be able to avoid answering them"; and "let's hope he gets bored with all these PQs now and keeps quiet . . . even goes home!"

No one who read Sir Richard's Scott's report on the sale of arms to Iraq can believe that the corruption of the civil service began with new Labour. All it has done is add to Tory centralism. But if enough small changes are made, they become cumulatively revolutionary, and we move into an unrecognisable world. To the PM's power to fix the date of the election must be added the new advantages of incumbency - political advisers, Whitehall press officers, the government's huge advertising budget and a civil service that knows it must please its masters. These are formidable forces for the perpetuation of a one-party state. If they don't match the resources available to Berlusconi, they are too close to the Italian model for comfort, and growing closer by the day.