The full text of Charles Kennedy's speech to his party's Scottish conference

"This year marks a watershed for our party - both in Scotland and in the UK as a whole.

Here in Scotland, we are fighting our first election for over eighty years as a party of Government.

We have a proud record to defend.

I am convinced that under Jim Wallace's inspiring leadership we shall win more votes and more seats.

And at the UK level, on the most important issue of the day - on Iraq - we Liberal Democrats have been speaking up for the majority of the British people - with the other parties in a minority against us.

We have asked the questions which needed to be asked - the questions which the so-called official opposition failed to ask.

I am proud that the Liberal Democrats have been in the forefront of the challenge to the Government. And the votes two days ago in Parliament showed how many people from all parties agree with us.

The biggest rebellion by its own supporters any Government has ever suffered. Highly respected former Cabinet Ministers from both the Labour and the Conservative parties in the lobbies with us - not just Chris Smith and Frank Dobson, but Kenneth Clarke, Geoffrey Howe and John Gummer as well.

As I speak, the Chief Weapons Inspector Hans Blix is preparing his latest verdict to the United Nations. I have always said that Dr Blix's judgement is crucial on this issue.

My criticism of both the British and the US administrations has been that they have contemplated by-passing that judgement. It would be quite wrong to acquiesce in an attack on Iraq unless Dr Blix had declared that Iraq was in material breach of UN resolutions.

My great anxiety is this. Whatever the international community decides in the end, it must be decided on the soundest possible evidence and with the greatest possible support.

But by tabling a second resolution in this precipitate way, President Bush and Tony Blair risk undermining the force of the evidence and the breadth of the support. They risk undermining the international coalition against terrorism. In fact, they risk undermining the authority of the United Nations itself. And the consequences not only for the resolution of the current crisis, but also for the crises of the future, could be devastating.

Let us now await the final assessment of Dr Blix. Let us then see what the UN Security Council decides. And after that, let us have a clear vote by the British House of Commons.

Until those conditions are met, there can be no case for the United States to take independent action against Iraq - and no case for the British Government to join in an American attack.

The issue of Iraq has certainly made the Liberal Democrats appear more relevant than ever in national politics. But we're appearing more and more relevant over domestic issues too. And a great deal of this is due to your efforts here in Scotland.

When our opponents south of the border say: you can't abolish student tuition fees, we can say 'yes we can'. We've done it in Scotland.

Now in England we face the additional burden of top-up fees. As Liberal Democrats, we believe that education must be funded from progressive taxation - and that includes higher education.

Any other option clearly acts as a deterrent to students from poorer families. That's why applications to universities in Scotland have increased so much more than applications to English universities. So we've decided that it's right to continue with our policy to levy a 50% rate of income tax on incomes over 100,000 pounds a year. And we would now use the extra revenue which that generates to deliver the extra funding which higher education needs - both south and north of the border.

That means that Scottish universities will keep - and enhance - their world class reputation. And it means at the same time that they will be continue to be open to all regardless of income.

What we're proposing is not, in effect, a tax increase. It is scrapping an unfair levy on students and replacing it with a tax on those best able to pay. We are not, and never have been, a high tax party. We are a party which believes in being honest about tax and being open about tax.

But scrapping tuition fees isn't the only Scottish achievement we can cite in Westminster.

When our opponents say: it's far too complicated to bring in free personal care for the elderly, we can say, no it's not, we've done it in Scotland.

When they say: we're going as fast as we can to develop alternative energy schemes, we can say no you're not, we've done far more for wind power and wave power and tidal power in Scotland.

When they say: you can only open up Government a certain amount - too much freedom of information jeopardises the security of the state, we can say we've got far more freedom of information in Scotland - and it works very well.

And when they say proportional representation doesn't work, we can say: it works in Scotland. It's got us a partnership government that has made a real difference. It's made life better for the Scottish people in all kinds of ways that would simply never have been achieved by Labour if they were in power on their own.

And what's more, a fair voting system is in sight for local government in Scotland as well, thanks to the Liberal Democrats. Here, more than anywhere else in the UK, we've suffered from single party rule on local councils.

At best, it's led to complacency and incompetence. But it's often led to corruption too. Fair votes for Scottish local councils will be a great prize after the great advance I know the Scottish Liberal Democrats will make in May.

I've read that I am supposed to have gone cold on campaigning for fair votes for Westminster. Well that's news to me. I'm a realist. I know that we're not going to achieve what we want as soon as we want. But that won't stop me fighting to achieve it.

The next two or three years will be the most challenging and the most exciting which this party has ever faced. We've had surges of popularity in the past.

But this time, our standing in the polls isn't based on a sudden rush of enthusiasm which can easily melt away. It's founded on a steady build-up of support at grass roots. It's not just a way of protesting against our opponents; it's a sign of genuine support for the causes we've championed.

And it's based on an outstanding record of government in Scotland and Wales, and a sure-footed reputation for running so many local councils so well.

Our opponents are weakened. You have only to look at the faces of the backbench Labour MPs when I'm talking about Iraq to see how many of them agree with me and how few of them agree with their own leader. For the first time in his leadership, Tony Blair looks seriously vulnerable.

Iain Duncan Smith meanwhile looks weaker than ever.

For some time now, I've been saying that the Conservatives are not an effective opposition. I think we need to revise that judgement. In the past week, they have become a highly effective opposition - to each other.

I thought that I'd seen the worst kind of civil war that could possibly break out within a party when Labour was tearing itself apart in the early 1980s. In comparison with the current Tory feuding, those Labour arguments now look like a mild disagreement.

I worry that the Tory party will be causing large numbers of redundancies - not only in Central Office but amongst a group of people who are always close to my heart - the political journalists.

For generations they've made a humble living interpreting the code in which Tory politicians air their differences. But now, the Tories have simply abandoned the code.

You don't need anyone to explain what you mean when you call somebody mad or a cancer. After decades of stabbing each other in the back, the Conservatives have taken to bludgeoning each other from the front.

No wonder the Scottish Conservatives don't want Iain Duncan Smith north of the border during the Scottish election campaign. From what I read, his phone line is jammed with messages saying "stay away for the sake of the party".

It must be a terrible blow for a man who apparently went to the trouble of adding an extra "i" to his Christian name to show his special affinity for Scotland.

But with or without Iain Duncan Smith, the Scottish Conservatives are struggling. The voters know that a Conservative vote in Scotland is a wasted vote. The Tories have no chance of putting their policies into practice - because they won't contemplate working with any other party.

And of course the Nationalists are a shadow of their former selves too. Independence looks increasingly irrelevant. But independence was the glue which stuck the SNP together when they agreed on very little else.

So no wonder the disagreements are surfacing more and more. You wonder, for instance, how the nationalists can sustain their claim to be environmentalists when individual SNP members support every road and airport scheme which is ever suggested.

Like the Conservatives, the SNP has failed to understand that politics in Scotland has moved on. Scotland is beginning to practise the new politics which we Liberal Democrats have advocated for so long - a politics which values co-operation between parties where there is agreement - a politics which believes in constructive dialogue - not yahbooing and name-calling.

But the weakness of our opponents is not the main reason that I believe we shall do well this May. The reason is that we have policies which will do so much to improve the lives of the people of Britain and the people of Scotland.

Scotland has so much potential. And we Liberal Democrats have shown that we know how to unlock that potential.

Be ambitious for Scotland. Be ambitious for the Liberal Democrats. And there will be no limit to what we can achieve."