By BBC News Online's political correspondent Nick Assinder

Peter Kilfoyle's decision to resign his junior government job does not, on the surface, look as if it should cause Tony Blair to lose much sleep.

Mr Kilfoyle has insisted he will remain totally loyal to the leadership and will not allow himself to become a rallying point for backbench dissidents.

He is not widely known outside the Commons or his constituency, and he was unlikely to have made it to the very top of the cabinet tree.

It is also rumoured that he has stood down to allow himself to stand as mayor of Liverpool when the opportunity arises.

But his decision, no matter how carefully managed, is a major blow to the prime minister because of what it says about the stresses at the centre of New Labour.

Although Mr Kilfoyle comes from the Old Labour school, he is a fiercely-loyal Blairite and powerful opponent of the far left.

He rose to prominence when taking on the Militant tendency in Liverpool - a battle which saw the then leader Derek Hatton finally ousted.

That won him a special place in the affections of the New Labour leadership and he has always been seen - rather like John Prescott - as one of the most successful Old Labourites to be embraced by Tony Blair.

Fed up

But the underlying message from his resignation is that he has become deeply disillusioned with the direction of the government.

He is apparently fed up with the emphasis always being given to ensuring Middle England is kept on side while core voters - such as those in his own Merseyside constituency - are taken for granted.

His friends say he had been considering his position for some weeks and it is likely the NHS crisis, the decision not to uprate the minimum wage and the continuing squeeze on public services pushed him to his decision.

The great threat to Mr Blair is that, if someone as loyal as Mr Kilfoyle has come to the end of his tether, who else might be quietly losing patience?

There are many on the Labour benches who are in exactly the same position and who are finding it increasingly difficult to support the "Islington agenda", as it has been dubbed.

They blame the current direction for the string of problems over the health service, rising crime and public spending.

Take revenge

So Mr Blair may find that, as a general election campaign looms, the voices demanding a change of tack become louder.

Probably more worryingly, traditional Labour voters - who have already been shown to be disillusioned with the government - may take their revenge at election time.

One of the most significant factors in the recent polls for the European parliament, local councils and Welsh and Scottish assemblies was the number of people who did not bother to vote.

Mr Blair was warned at the time, most notably by minister Peter Hain, that there was a danger the party was ignoring its core voters to its cost.

There is now a growing anxiety in some parts of the Labour party that it could see a huge drop in its vote at the next general election because of normally-loyal voters sitting on their hands.

And Mr Kilfoyle's resignation has exposed those fears.