Mr Blair wants to win the backing of workers
The booklet is being sent to managers in the health service, police and education outlining public sector reforms, including a greater role for private companies.
Cabinet documents leaked to a national newspaper suggest Mr Blair has ditched his commitment to end the two-tier workforce in the public services.
This is where new staff are offered worse terms than existing employees.
'Encouraging'
A spokesman for the prime minister refused to deny the reports saying that plans were "still at the draft stage".
But the government is under pressure to keep business happy after its decision to force Railtrack into receivership.
Business leaders say they are not prepared to guarantee private sector recruits the same terms and conditions as workers inherited from the public sector.
John Cridland, deputy director general the CBI, said: "If that is what is going to happen then outsourcing will not work and customers will not get better public services."
'Missed opportunity'
He called speculation that the government was ready to do a U-turn on the issue "encouraging".
But Mick Graham, of the blue-collar GMB union, hit out at the apparent change of heart.
He said ministers seemed "hell-bent" on privatising public services "with little regard for the dedicated, hard working public sector workers".
Bill Morris, general secretary of the TGWU union, said Mr Blair's pamphlet was a "missed opportunity" to confirm the government's commitment to end the two-tier workforce.
'Incoherent'
The 30-page document offers public services staff "a partnership for change", and is designed to convince workers of the government's plans.
But Downing Street defended the document, saying there was a need to explain why the government wants change, as part of a dialogue with those at the "sharp end".
Officials describe the government's programme as a "coherent philosophy, a coherent strategy".
'Redesigning the service'
In a speech, Mr Blair said consumers of public services must come first, adding that the government was relying not only on good will and hard work but also on the ideas and experience of workers.
"The general message is one of investment and reform - putting money in, redesigning the service round the user of the service," he said.
In a speech at a Conservative health forum, Mr Duncan Smith said the government's action in the health sector is the opposite of what it promised.
Instead of devolving power to doctors and patients, the government was taking it away, he said.
The NHS Reform Bill, currently passing through Parliament, will give the government 58 new powers, he argued.
"This is a wholly centralising piece of legislation. Labour's control tyranny will continue," he said.