Question: Media observers assessment is that after a strong start and a sound election result your leadership has stalled. How would you respond to that?

Charles Kennedy: Quite the opposite is the case. For well over a year we've had our best, most sustained, opinion poll ratings ever - consistently topping 20 per cent. That's better than anything that's gone before. And 30 per cent of the popular vote in the English local elections in May was our highest ever share of the vote in a national election ever.

So I think if you look at that scenario then clearly the evidence is there that we're in a stronger position now than we were at the general election, and a much stronger position that we typically are at this stage of a parliament.

The main thing is that on both the big domestic issues such as public services, and the overwhelming international issue of Iraq, we have cut a distinctive stance and have been the subject of comment and criticism as a result.

I think the momentum is developing well as we go into this year's conference.

Question: Stories that you were lacking focus were dismissed as a slur. Who do you think was behind it?

Charles Kennedy: I have no idea to be perfectly honest.

I suspect that at this stage in the parliament, because we are stronger showing than we ever have been, that inevitably there will be attacks, from quarters that are not supportive of, or sympathetic to, the Liberal Democrats.

That should come as no great surprise, and I keep telling people within the ranks that we are going to have to prepare ourselves in the second half of the parliament for more of the same. The more successful we are, the more we will be attacked by our opponents. That just goes with the turf.

Question: Are the attacks coming from a Conservative-biased media?

Charles Kennedy: Again I don't know. In the 20 years I've been in the House of Commons, I've never spent an awful lot of time fretting about what appears in newspapers. I'm more concerned about what voters think.

Where this sort of thing emanates from, I do not know. My cardinal principles, refined over 20 years, are: don't complain, don't sue and don't shoot the messenger. I see no reason to change that.

Question: How can you turn the heat up on Labour this summer?

Charles Kennedy: There's a number of things. First of all, the campaign for the Brent by-election is now underway. I've visited there and although we're starting from a lower base in this constituency, through a whole combination of circumstances, I think we have encouraging prospects, especially when campaigning proper gets underway. The actual writ hasn't been moved yet.

Question: Do you think the government will try to delay the by-election because of its current standing?

Charles Kennedy: They were certainly in no hurry to call it and I don't think that there's any modern precedent for having by-elections in the summer recess. It may take place in September or October.

I'm quite sure that the government are conscious of the fact that they are going through a very bad patch, not least with their own supporters.

They're having difficulties for reasons that people understand in motivating their own people, they've lost a lot of members - with a significant number to us.

I can understand why they are not in a rush to have this by-election. I'm encouraged because I've visited Brent East and I'm getting lots of positive feedback from our campaign HQ.

A lot of our people, who could have been forgiven for having a good rest after fighting elections in May, having been juggling their own summer arrangements to spend time in Brent. Come September, when the political season is underway, you'll see a major push by the Lib Dems.

Question: Do you think Labour's become disengaged from its grassroots supporters and the wider public?

Charles Kennedy: Yes I do. Up until now, a lot of Tony Blair's approach has been to very consciously distance himself from his own members in the Labour Party, and make a virtue of that, on the assumption that they have nowhere else to go.

As a result he has benefited in terms of broader public opinion. What's happening now is that you'll see a lot of those people tearing up their membership cards, or coming to join the Lib Dems, because they do see that they have somewhere else to go.

And this approach of his is not playing any longer with the wider public either, who clearly have lost confidence and trust, as he himself was forced to acknowledge, in Tony Blair as leader of the country.

Question: Iain Duncan Smith is battling for better drug treatment services and scrapping tuition fees. The PM's accused him of opportunism that the Lib Dems would be proud of. Do you think the Tories are adopting your party's style?

Charles Kennedy: Oh there's no doubt that they're trying to, yes. I suppose imitation is the sincerest form of flattery. If you look at local constituency campaigning, the Conservatives are trying to ape long-standing Lib Dem techniques.

Nationally they've also tried to adopt some of our policies, although these haven't been very successful for them, because people don't really believe them. Probably the most dramatic example was in promising to abolish tuition fees. They did a complete about turn in favour of a long-term Lib Dem policy, which we've implemented in Scotland where we are in Government. But rather than promising to fund this policy properly, they said that they would only be able to pay for it by slashing the number of people that would be given the chance to go to university.

IDS's u-turn on tuition fees created a backlash within the Conservative Party. You've got a cross-section of people ranging from Michael Portillo, Francis Maude and Stephen Dorrell who have come out against this policy change saying it's not a true sign of the party's previous track record or what should be its approach. So, they have yet another internal fight on their hands.

On Iraq they aligned themselves in a quite blind fashion with the government. They were quite gung-ho for war, irrespective of what the UN would have done, even when the government was trying to secure support from the UN.

Now they are seeking to back-peddle on this because they realise that the judgments that they made at the time were at best questionable.

We've been the most consistent in the House of Commons and generally on the issue.

Question: Do you think there's a consensus emerging between yourselves and the Conservatives, given the co-operation between the two sides in the Lords?

Charles Kennedy: I don't detect that there's any great appetite on either side for any deeper co-operation between the two opposition parties in the Commons. We have had some - the all-party amendment on Iraq had Liberal Democrat support plus support from people like Ken Clarke and, if my memory serves correctly, John Selwyn Gummer - although obviously not from Iain Duncan Smith.

There are issues from time to time where we can work with, if not the existing Conservative Party leadership, certainly elements of the Conservative Party. It's just a reflection of how split the modern Tory party is on so many issues. Another example perhaps further down the track would be European policy. There are still a significant number of Conservative parliamentarians who are much closer to our thinking than they are to their own leader's views.

Question: We're now at the point in the summer where the traditional Conservative leadership fighting begins. Do you think Iain Duncan Smith will lead them at the general election?

Charles Kennedy: I'm always a bit loath to give advice to the Conservative Party about what they ought to do about their leader, whoever it is at any given time. One of smallest and select bands of trade unions is the one for party leaders. I try to avoid getting drawn into what may happen to either of my two opposite numbers and I hope they would acknowledge that and extend the same courtesy.

It is a matter for Conservative MPs whether they want to have another leadership contest. I would say that from the outside looking in, as objectively as I can, I would have thought the Tories are unlikely to pursue another leadership election in the course of this parliament.

I think they would look frankly rather crazy if they did. I do not claim any insight into the thinking of Conservative MPs this summer.

Question: Would you like closer links with the trade unions?

Charles Kennedy: I have made it one of my priorities to have very good relationships with the TUC and individual union leaders.

Brendan Barber and I have just had what will be, I hope, the first of many regular private meetings.

Question: Was it quite cordial?

Charles Kennedy: Yes, I've known Brendan when he was John Monks' number two. We have an excellent relationship. I've just written to him on the role he played in helping to resolve the BA dispute.

I've been the first ever non-Labour party leader to be asked to address the Trade Union Congress. That's a reflection of how good relations are.

We have very good relations with the CBI too. Indeed Digby Jones came and spoke at the Lib Dem Conference a couple of years ago.

But I don't think you are going to see a major divorce either politically or financially between the trade unions and the Labour Party.

Although, with a growing number of trade unionists voting Liberal Democrat - we picked up a large number of members with a stall at the TUC conference - more than a few union leaders are becoming sympathetic towards the Lib Dems.

Question: The BA dispute was about the work-life balance. Is that going to become a live issue over the next few years?

Charles Kennedy: I suspect it probably will. It's a reflection of the changing demography and the country as a whole. Progressive, go-ahead management and enlightened trade unionists should see this as an opportunity - not a threat - to re-evaluate the territory of industrial relations.

What is very interesting is that in the eventual outcome a categoric role was given to Brendan Barber. It wasn't just a matter of referring it to ACAS. It was a good, healthy development. But the whole saga was not without fault on both sides.

Question: What's on the road map for the run up to what looks likely to be a Spring 2005 poll?

Charles Kennedy: There's quite a lot in terms of taking forward specific policy making which has already been in the pipeline over the past year. Clearly, the public services are going to be enormously important at the next election. I've just outlined some important Lib Dem thinking on this. Our Spending Review is about reforming the way central government works to bring power closer to the people. Our plans will involve a significant restructuring of Whitehall, and a major devolution of public services.

We want to abolish or merge a number of central government departments and cut the number of ministers and bureaucrats at Westminster, as well as many of the central subsidies they administer. By doing so, we could save up to £5 billion a year which can be invested directly into front line public services - giving us more teachers, more doctors, more nurses and more police.

Citizens' rights, like freedom of rights and more devolution is another area. There's a very positive agenda for the Liberal Democrats there.

Question: Tell me a bit about the spending review. Is that going to be a party conference issue?

Charles Kennedy: The Lib Dem Treasury team have been working their way through the various departments to see where these changes can be best achieved.

We want to put the emphasis, now that the government is spending more, on the question of whether this money is being properly spent and how effectively can this money be deployed. It's about saving money where it is doing little good and redirecting it where it can be more beneficial.

We'll be seeing a bit more of that at the conference but we won't get into the nuts and bolts of it until next Spring, once we've had the budget. It will be an issue that's going around but still very much up for discussion.

Question: Do you accept PR for Westminster elections is now off the agenda for as long as Blair's in No 10?

Charles Kennedy: It's not off the agenda because we pinned Labour down to a manifesto commitment - which is, after all, a promise to the British people. Having said that I detect no strong appetite from the prime minister and others around him to commit himself to PR.

Question: How can Blair rebuild trust with the public?

Charles Kennedy: In a nutshell, there's just got to be much less spin, because it's become such an ingrained perception of how his government conducts itself - and it's corrosive.

The prime minister has also got to be more of a team manager in his approach to the Cabinet rather than appearing to operate as a solitary figure.

Question: He says history will prove him right. What do you think?

Charles Kennedy: Who knows? I have never said that I have discounted the WMD argument. The fact that we have not yet turned any up yet is not conclusive. But I do not believe he was right to go to war in the circumstances he did.

The issue for me has always been: were there sufficient grounds for defying the UN and joining the Americans in going to war, while Hans Blix and the weapons inspectors were making progress and asking for more time to complete their work? I did not believe that there were and I stand by that judgement. The issue now is what happens next.

Question: Do you think there should be an end date for British involvement in Iraq?

Charles Kennedy: Very difficult to say. What there definitely needs to be is a much clearer strategy for policing of the peace and the restructuring of the country itself. The more that can be internationalised the better.

It is more and more in the eyes of the average Iraqi being seen as a force of occupation with no clear objective or end game in sight. Tony Blair needs to be much clearer as to where we are.

Question: Is Iraq set to become another Northern Ireland?

Charles Kennedy: I wouldn't want to draw any direct comparisons, but history is littered with examples of so-called liberating forces coming to be seen as occupying forces in the eyes of local people.

There are some in Iraq who are seeing it that way and there are terrorist groups that see it as a fertile recruiting ground.

Question: Do you think Alastair Campbell should go?

Charles Kennedy: It's not for me to go sounding off about whether he should stay or go.

I would have thought, knowing Alastair, that he is aware there is a certain shelf-life for people in his peculiarly exposed political position.

I wouldn't be at all surprised if, by the end of this calendar year, Alastair Campbell is no longer in the position he occupies now. How and when that will come about, the jury is still out.

Question: What do you think of the media's obsession with Campbell?

Charles Kennedy: There is this idea of the hermetically-sealed Westminster bubble involving the media, civil servants, lobbyists and politicians.

What the politicians have got to bear in mind is that for the vast swathe of people in this country it is essentially meaningless and far removed from their priorities.

The more politicians can break free from that straightjacket, the better it serves the public.

Question: Does it add to the disconnection between people and politicians?

Charles Kennedy: Yes it does, and this is very unfortunate because Tony Blair came into office six years ago with probably a better opportunity than just about any other post-war prime minister to redress the balance in the interest of the individual and communities. But he failed to do so.

We're now finding ourselves on something of a tangent, focusing endlessly on the personalities rather than the processes and policies.