Tony Blair placed Britain's compensation culture at the top of the Labour party's list of priorities in a third term of government.

The move was predicted by Insurance Times in July last year when it reported that the compensation culture would form a key part of the Labour party election manifesto.

In an interview with The Observer, the prime minister said he was dismayed at the current situation where teachers, doctors and other public servants were hampered in their jobs for fear of frivolous litigation.

Blair said: "I was quite shocked to be told by people who were running a nursery that they were worried about letting the kids out into the playground when it was wet in case one of them slipped and fell and they ended up having a legal case.

"We have got to look at a way of getting people protection on that."

He blamed the media in part for creating a climate of fear over relatively small risks like food safety and mobile phones, which end up draining resources that would be better spent in other ways.