UK 11 July 2011 Doing the right thing on phone-hacking is no guarantee of success Ed Miliband's response to phone-hacking is picking up plaudits from the public but losing him friend Sign UpGet the New Statesman's Morning Call email. Sign-up Ed Miliband's conversion on the road to Wapping may have won him plaudits among the Labour grass roots and the liberal press, but it's starting to generate concern within the shadow cabinet. On Sunday Labour's leader admitted he personally had not done enough to challenge the excesses of News International, before pointedly stating that Labour had been "too close" to the Murdoch empire. On the same day, the Mail on Sunday quoted, "well placed sources" claiming Tony Blair had urged Gordon Brown to block close ally Tom Watson from pursuing his one man crusade into the phone-hacking scandal. Some people think thing the two events are not unconnected. "They're attempting to re-write history", said one shadow cabinet source. "They're basically saying Tony sold out to Murdoch but Brown would have stood up to him. It's a fantasy." "Ed's people feel that for just about the first time in his leadership they've located a profitable seam," said another source. "It's playing well for them at the moment, and I understand why they're going with it, but they're not thinking strategically". Those worried about Miliband's stance on the issue have two broad concerns. The first is that the attacks on Labour's past relationship with the Murdoch press are really coded attacks on Tony Blair and his New Labour project. Others said it was a direct rebuttal to a speech Blair delivered to the Progress conference on Friday, in which the former Prime Minister directly attacked Brown - "From 1997 we were New Labour. In June 2007, frankly we stopped. We didn't become Old Labour exactly but we lost the driving rhythm that made us different and successful" - and warned Ed Miliband against moving away from his pro-business agenda. Even Blair's own supporters acknowledge the speech was provocative. "To be honest, it was a bit silly," said one former Blair ally. "He didn't really say anything new, and just managed to be antagonistic". Friends of Ed Miliband robustly reject any suggestion that his comments on Sunday were a response to Blair's speech, or that they constituted a premeditated assault on his New Labour legacy. "That's bollocks," said one. "Ed acknowledged that everyone was playing the game. He doesn't deny he was part of it too. But the world changed last week. This isn't Blair v Brown or Ed v Blair or Labour v News International. It's about doing what's right. There are some people who get that, and some who don't". The second concern being expressed by some senior colleagues is that the stance on News International heralds a return to the liberal political positioning which characterized Ed Miliband's leadership campaign. "Ed's going back to defining himself against New Labour", said a source, "it's about worrying about what the party thinks of him, instead of what the country thinks of him". Another insider pointed to Miliband's description of the 'new' political centre ground, which he characterized as: "You speak out on these issues of press responsibility, a new centre ground that says that responsibility in the banking system - which we didn't talk about enough when we were in government - is relevant, a new centre ground that says people are worried about concentrations of private power in this country when it leads to abuses." "We're going back to damn the bosses and eat the rich," said the source. Another shadow cabinet insider pointed to the attacks on the News International culture. "We're now running around attacking papers like the News of the World for exposing abuses in welfare and immigration. But the problem wasn't that News of the World was writing this stuff, the problem was we stuck our heads in the sand and tried to ignore it when we were in Government". Again, sources close to Ed Miliband brush aside the criticism. "The premise is false. Ed has demonstrated continuity and clear leadership on issues such as personal responsibility at the bottom as well as the top; on the strikes, where he was the first Labour leader to actually condemn a strike; and on standing up to the unaccountable power of the press. The problem is people are still thinking in old terms of whether something is 'left' or 'right'. What Ed's going to do on this, and all the other issues he confronts, is take a step back and say: 'What's the right thing to do and what's the wrong thing to do'. People are just going to have to get used to the fact that's how he operates." Ed Miliband has won praise for his response to the phone-hacking crisis. He has been seen to impose himself on an agenda and capture an issue for probably the first time since he became Labour leader. But in politics, doing the right thing is no guarantee of success. › The state doesn't need the private sector to be entrepreneurial Subscribe For daily analysis & more political coverage from Westminster and beyond subscribe for just £1 per month!