Sir Keir Starmer is accused by the Transport Secretary’s allies of using him as a “scapegoat” to salvage a £1bn deal with the owners of P&O.
DP World announced it would continue the investment after the Prime Minister publicly rejected comments made by Louise Haigh about the investment.
The company, headquartered in the United Arab Emirates, had threatened to pull out of a major business summit after calling itself a “rogue operator”.
But he was persuaded to return to the table after senior officials at No 10 telephoned the company late at night to distance themselves from his remarks.
DP World confirmed on Saturday night that the announcement of a £1bn investment in the new Thames freeport would be made on Monday as planned.
DP World chairman Sultan Ahmed bin Sulayem is set to approve the fund at the UK Global Investment Summit in central London.
A spokesman for the company said: “Following constructive and positive discussions with the government we have been given the clarity we need.
“We look forward to attending the international investment summit on Monday.”
A Downing Street source added: “The reason they come is because we operate as we do overnight, with seriousness, warm commitment and partnership.
“We have shown that we are sensible and serious partners. “That’s what brought these investors here on Monday, and that’s how we solved this problem.”
The turnaround comes after No 10 blamed Ms Haigh for the row, saying comments she made in an on-air interview on Wednesday had angered the company.
The Transport Secretary told ITV News the owner of P&O ferries was a “rogue operator” and encouraged British consumers to boycott it.
His remarks were a reference to the firm’s decision to cut 800 staff, mainly in Dover, in 2022 and plan to replace them with cheaper overseas workers.
Ms Haigh’s description of P&O as a “rogue operator” accurately reflected the language used in a Government press release issued earlier in the day.
The statement was published jointly with Angela Rayner and signed by No 10.
But Downing Street put all the blame on Ms Haigh, saying the boycott call was the real source of DP World’s anger.
Sir Keir rejected her comments outright, saying they were “not the Government’s view”.
That approach angered some Labor MPs, who until recently said Ms Haigh was being punished for expressing the party’s position on P&O.
Ian Byrne, Labor MP for Liverpool West Derby, said: “Lou Haigh is right to call P&O Ferries a rogue operator.
“They laid off the entire workforce without notice via video call and replaced them with subcontracted workers.
“These are the practices of a rogue operator that must never be forgotten or forgiven by our movement.”
A Labor MP said he agreed with claims that Ms Haigh had been “scapegoated” and questioned why Ms Rayner did not share any of the blame.
They added that No 10’s decision to prioritize relations with DP World rather than defending itself was “incomprehensible behaviour”.
Another Labor MP said Ms Haigh was “right to point out P&O’s appalling behavior in the past” and that Sir Keir should not back down in the face of threats.
They said: “If the company wants to show that it has changed and wants to invest in Britain, that is of course welcome.
“But if they are threatening to withdraw investment over a minister’s fair comment, then perhaps not much has changed.”
‘Absolutely unacceptable’
Matt Wrack, chairman of the Labor Fire Brigades Association, also criticized the “briefing” for Ms Haigh as “completely unacceptable”.
“Louise Haigh has the full support and solidarity of the Fire Brigades Association in presenting clear opposition to P&O and other fraudulent employers,” he said.
Some critics pointed out that opposition leader Sir Keir had said the Conservative Party should cut ties with P&O until it reinstated sacked workers.
The row, amid suggestions that Sir Keir will reshuffle his cabinet early next year, has raised questions about Ms Haigh’s future.
But The Telegraph understands his position is not under immediate threat and the Prime Minister still has full confidence in him.
Doubts had already been cast over his long-term future in the senior team after he angered No 10 by ignoring the train drivers’ pay deal.
Given that he is one of the few left-wing figures sitting at the Cabinet table, replacing him could be politically sensitive for Sir Keir.