Sir Bill Morris, the outgoing general secretary of the Transport and General Workers' Union (TGWU), has accused ministers of "pandering" to racism.
Sir Morris' launched a scathing attack against the government
He said there was a "silent conspiracy" among ministers of "burying" efforts to tackle institutionalised racism, nearly five years after Lord Macpherson's report into the killing of black teenager Stephen Lawrence.
The Macpherson report sought to investigate events surrounding the death of the 18-year old who was stabbed at a bus stop in south-east London in April 1993.
The Home Office rejected Sir Morris' comments, saying: "They could not be more wrong or inaccurate."
Sir Morris made the allegations in an interview with the political news website, ePolitix, ahead of next week's TUC conference in Brighton.
He said: "There is an almost silent conspiracy to jettison the report of Lord Macpherson, who identified institutionalised racism as a factor which inhibits the growth and progress and development of black people taking their rightful place as managers and leaders.
"That embarrassed Britain and there are a lot of people who are trying to bury that agenda and there are some of them in government."
A Home Office spokesman responded: "[Sir Morris'] comments on the Macpherson report are inaccurate as we have implemented the recommendations of the Macpherson report and repeatedly said that the next challenge is to tackle the glass ceiling that many
black and ethnic minority people face in this country."
Sir Morris - who will stand down as TGWU general secretary this autumn - said Prime Minister Tony Blair had a lot of "remedial work" to do to win back trust he had lost in focusing on international issues, like Iraq and Europe.
He also criticised the government over its policy on immigration.
He said members of the government "are pandering to anti-social attitudes out there who
"I think they have got it badly wrong on the whole context of race and immigration," he added.
The Home Office spokesman denounced his comments on immigration as "wrong."
"We can only build trust, confidence and tolerant communities if we tackle abuse of our asylum and immigration systems which is what we are successfully doing, while opening up new legal routes for migrants to come and work here," the spokesman said.
The teenager's death prompted an overhaul of police attitudes
In 2001, Dr Marian Fitzgerald, a former Home Office advisor, accused the Macpherson report of failing ethnic minorities and said it had led to "a potential backlash among whites".
The former advisor said in a book published soon after the report that it "turned everything that happened to ethnic minorities into a problem that is to do with race."
But the Lawrence family's lawyer Imran Khan disagreed, saying the report had articulated for the first time in official
circles the fact that racism exists.