The prime minister has called for a "grown up discussion" on Labour's future policy direction with an appeal for party members to "take risks".

Launching his "big conversation" initiative in Newport, South Wales on Friday, Tony Blair said his party should not be afraid of holding an honest debate.

He said the government had "come to a fork in the road" with one option to "settle back" and the other being to "advance".

The prime minister published his "Prospectus", outlining a list of questions that needed to be addressed as the government builds towards a third term manifesto.

They ranged from "How do we ensure security and well-being in older age?" to "How do we provide a modern transport network?".

"This document identifies those areas of opportunity and concern for policy making and then asks some of the key questions that enable us to maximise the opportunities and minimise the threats," Blair wrote in a forward to the document.

"Facing up to difficult challenges should not frighten either the party or the country. After all it has been the key to the successes we have had so far.

"It's time for a grown up discussion. Big issues need real debate, a big conversation between politicians and the people."

The prime minister told his audience he was encouraging a "more open" means of debating Labour policy.

But he stressed that New Labour's "big idea" was "the same as the old idea - social justice".

He told his audience: "The hard part is how do you get social justice in a world that is undergoing such fast and quickening change?"

Appearing to acknowledge past failures, Blair noted that the government had been criticised for appearing to announce new policy first and explain it later.

But he pledged that the new process would prompt a genuine debate on the future of Labour policy.

And he said that seven years into government the party should "take risks".

"It is time for a serious grown-up debate about Britain's future choices," said Blair.

"This is what politics should be all about. Once again we are leading the way."

Earlier the Labour leader dismissed critics who have branded the project a "gimmick".

"It is easy for cynics to sneer and people to write off exercises like this," he said. "There is no scientific way of either gauging opinion or reacting to it."

Unveiling the blueprint Blair said ordinary members of the public should engage in dialogue about the country's future.

And he told Labour's National Policy Forum that tough choices and real problems remain to be addressed.

"Britain is changing for the better. The economy is strong, schools and hospitals are improving. Crime is falling," the prime minister said.

"But I know we can do even better. Now there are important choices for the future. Choices, not just for politicians but for all of us.

"So we want to begin a conversation with you about how together we can make the future fair not just for some but for everyone."

Ahead of the launch, Blair used a newspaper interview to hint at possible directions the exercise could take.

The use of fixed penalty notices against anti-social behaviour and petty crimes was one option trailed.

"One of the issues on crime increasingly will be to what extent are people prepared to use for low level crime a quick and sometimes summary form of justice," he told the Guardian.

"Normally you have to go through a court process to prove someone guilty and a penalty is levied at the end of it.

"There are then huge questions about how you operate the criminal justice system and drug treatment.

"Perhaps we need to construct a deal with people at each point in the system so they have a chance to go straight through treatment, or face the possibility of custody."

The government has denied that the initiative is an attempt to deflect attention from policy rows over foundation hospitals and top-up fees.

Culture secretary Tessa Jowell, however, conceded that the government would be unlikely to rethink big ideas such as top-up fees.

"The fact is that tuition fees are a solution to a problem of there being unequal access to higher education and not enough money," she said.

"I wouldn't expect us to change our position on tuition fees as a result of this consultation unless, in the course of the consultation, new solutions that haven't yet occurred to us in government become clear which address those fundamental questions."

The opposition has attacked the move as another gimmick to hide the government's failure to deliver improvements in frontline public service.

Conservative co-chairman Dr Liam Fox said the initiative was a "public admission of failure".

"Voters don't want a conversation with Tony Blair they want an explanation from him, they want to know why their taxes have gone up and why they have not had the delivery on health, education, pensions or transport that they were promised," he said.

"This is another example of the government trying to detract attention from their failures. This kind of spin and gimmick will not fool the voters any longer."

The Liberal Democrats also poured scorn on the prime minister's big conversation plan.

"Labour have been ignoring people for years now. This simply makes it official. Email your views, but everyone knows that from foundation hospitals to war in Iraq and tuition fees, Labour doesn't listen," said party chairman Matthew Taylor.

"Tony Blair has already said there's no reverse gear, so how can he respond to what he hears?"

Labour MP Graham Allen warned the government that it had to reconnect with its own MPs. "The most important conversation that the prime minister needs to engage in is with the Parliamentary Labour Party and with parliament," he said.

"They are the elected element of our democracy and unless particular arrangements are made for them to have a dialogue, the conversation will be seen to be bypassing rather than incorporating them."

Labour's "Big Conversation" document sets out 13 key questions facing the country.

These are given as:

• How do we build on economic stability?

• How do we do more to tackle poverty and inequality?

• How do we lead healthier lives?

• How do we make our communities safe?

• How do we give every child an excellent education?

• How do we balance work and family life?

• How do we ensure security and well-being in older age?

• How do we provide a modern transport network?

• How do we create a fair asylum and immigration system that benefits Britain?

• How do we safeguard our environment for future generations?

• How do we do more to connect politics and people?

• How do we make Britain stronger in Europe?

• How do we develop our concept of international community?