Ministers are to offer Labour MPs a new - and final - concession to head off a potential revolt on plans to reform England's schools.
Labour rebels claim a deal will be struck to allay fears over the bill
The move follows intensive private talks this week to break the deadlock between ministers and Labour MPs.
BBC Five Live has learnt that ministers are to give a clear guarantee on the amount of freedom local councils will have to build new schools.
The government originally planned to stop councils creating any schools.
It wanted only private firms, charities and parents to compete to set up the new generation of "trust schools", which will have special freedoms.
Ministers dropped that idea earlier this month, saying local councils would be able to build new community schools if they got the approval of both the education secretary and the schools adjudicator.
Under the latest concession, limits will be set on the ability of the education secretary to intervene.
Under the new move, sources say, successful education authorities will be free to compete to build new schools on equal terms with alternative bidders.
But schools which rate poorly in the "star ratings" published every year by the Audit Commission face the risk of a ministerial check, and possibly a veto, before being allowed to join a competition.
As planned, competing bids would be finally settled by the schools adjudicator.
Test for Blair
BBC Five Live chief political correspondent John Pienaar says soundings among Labour MPs suggest the latest concession - which the government is likely to depict as a clarification - may be enough to win over a significant number of potential rebels.
The education reforms are seen as a significant test of Tony Blair's authority as prime minister. Up to 100 MPs have said they could rebel.
Mr Blair is anxious to get the reforms through Parliament without having to rely on Conservative support.
Sources say the new guarantees will be set out in the Education Bill, which is expected to be published in the week beginning 27 February, when MPs return from a one-week break.
They would form part of a memorandum, attached to the legislation.
An education department spokesman said: "The secretary of state will be involved in whether new community schools are proposed by local authorities - that is and remains the case.
"Of course the track record of the local authority will be taken into account in judging a competition for a new school."
The bill will allow "trust" schools to be set up, with the more freedom to manage their resources, staff and admissions policies.
Ministers have already moved to quell a potential rebellion by proposing an explicit ban on schools interviewing either parents or pupils as they decide admissions.
Labour MPs and peers who raised fears the original plans would create a two-tier schools system demanded more details but said the government was moving in the right direction.
Lib Dem spokesman Ed Davey said it would not be clear until the Education Bill was published whether ministers were offering a real concession.
"This latest concession may be billed by Labour's spin doctors as 'their final offer', yet with problems remaining on fair admissions to local schools, Blair should stay in reverse gear," said Mr Davey.
Shadow education secretary David Willetts said: "Tony Blair is putting the internal politics of the Labour Party before reforms that he himself knows are needed to improve our schools. It is parents and their children who lose out as he retreats.
"He does not need to do this because we will support him if he offers real change."