Tony Blair has admitted the government is facing "testing times" but has urged Labour members not to "stumble" in the quest for a third term in power.

The prime minister vowed to press on with domestic reforms even if his views "cause offence" to core supporters.

Speaking to the party's conference in Bournemouth, he conceded that government was "tough".

Blair said he would not back down in the face of a criticism from the left.

"Here we are, poised six and a half years in, with a fantastic opportunity, to use or lose," he said.

But he accepted that the government had faced "testing times".

"Give up on it or get on with it? That's the question," Blair said, agreeing with an enthused audience that urged the latter course.

Now was the time for Labour to "stride forward where we have always previously stumbled".

"If we faint in the day of adversity out strength is small," he said.

"And our's isn't. We have the strength, the maturity, now the experience to do it. So let it be done."

The prime minister warned his party against returning to the "comfort zone" of opposition.

"Opposition was easy, all our MPs had to do was go back to their constituencies and blame it on the government," he said. "Some of them still do."

He said the coming months would be "a test not just of our belief but of character".

Blair admitted that "inexperience" had led ministers to encourage high expectations immediately after gaining power in 1997.

But he insisted the government was "making a difference".

Addressing his critics on issues such as student top-up fees to fund Britain's universities, he had an equally frank message.

"To pretend it will all come from the taxpayer is dishonest. It won't and it wouldn't be fair if it did."

Blair was equally trenchant about his own leadership - although he conceded the government may have made "mistakes".

"I know I am the same person I always was, older tougher, more experienced, but basically the same person believing in the same things," he said.

"I've never led this party by calculation. Policy you calculate. Leadership comes by instinct."

And the government's woes had stiffened, not diluted, his resolve.

"I believe the British people will forgive a government mistakes, will put the media onslaught in more perspective than we think," he told grassroots members. "But what they won't forgive is cowardice in the face of a challenge."

Six years of government, the war with Iraq and the fall-out from the death of Dr David Kelly had left Blair "more battered, but stronger within".

But he added: "I can only go one way. I've not got a reverse gear. The time to trust a politician most is not when they're taking the easy option."

The Labour leader pledged to engage in the "biggest policy consultation" ever to have taken place in the UK.

To counter suggestions that second term policy is being dictated by a small group inside Number 10 Blair said he wanted to "engage with ordinary people's hopes and fears".

He said ministers and MPs would be holding open debates around the country to discuss policies for a fairer Britain.

"The ministers from me down, our MPs out in every constituency hosting discussions that engage with the whole community," said Blair.

"So when we begin our manifesto process, when the policy forum draws our thinking together, I want it to address the big questions, engage with ordinary people's hopes and fears."

The prime minister said he wanted to generate "a progressive, imaginative, vibrant public debate about how we together build a future fair for all".

Pledging an end to a system of "one size fits all", Blair said he wanted public services that "the founders of socialism dreamt of".

"I don't want the middle class fighting to get out of the state system," he said.

"I want them fighting to get into it, but on equal terms with working class parents and children."

Leaving public services to run along existing lines was not an option, the conference was told.

"Because the world changes we have to change," said the premier. "No longer 'one size fits all'. Recognising that in the 21st century you can't run a personalised service by remote control."

Modernisation does not mean privatisation, he said in an appeal to his trade union critics.

But he said the government "had to go faster and further" in banging the drum for change.

"Not to privatise but to revitalise a public service we all depend on," explained Blair.

And he warned that Labour would have no truck with the process of "managing decline".

Memories of "the three million unemployed, the two recessions, the negative equity, the double figure inflation" of the Tory era should stiffen Labour's resolve, he said.

"When we get to the next election, believe me," said Blair.

"We won't be fighting for votes with the hard left. We'll be fighting the hard right. The Tories."

On Iraq the prime minister urged party delegates to accept the honest motives which led him to take the country to war.

"Whatever the disagreement, Iraq is a better country without Saddam," added Blair.

Accepting that many had strongly disagreed with him, he said intelligence on terrorism and weapons of mass destruction had required action.

"I believe the security threat of the 21st century is not countries waging conventional war. The threat is chaos, it is fanaticism defeating reason."

But he conceded that he had courted - and secured - unpopularity in pursuit of his cause.

"I know on both terrorism and on Europe my views cause offence. But I can no more conceded to parts of the left on the one than I can genuflect to the right over the other," he told the rank and file membership.