Politics: Cameron sees bright future after 'difficult' year ahead

In his New Year's message, the Prime Minister said that much of the "heavy lifting" for tackling the deficit in the public finances would have to take place over the next 12 months.

But he also sought to strike an upbeat note, saying that once the current problems had been dealt with, the UK could be "one of the international success stories" of the new decade.

Mr Cameron stressed that he and Deputy Prime Minister Nick Clegg were not making cuts out of "ideological zeal" but because the country had been "living seriously beyond our means".

"The national interest dictates that we do the right thing, which is to act, not the easy thing, which would be to delay. In doing so, we should be clear: Britain has a really bright future to look forward to," he said.

"2011 is going to be a difficult year, as we take hard but necessary steps to sort things out. The actions we are taking are essential, because they are putting our economy and our country on the right path.

"Together, we can make 2011 the year that Britain gets back on its feet."

Mr Cameron said that when the coalition Government took office last May the economy was in deep trouble, but, as a result of the actions they had taken, it was now out of the "danger zone".

"We have a credible plan for restoring confidence in our economy. But we have to see it through. A lot of the heavy lifting will happen in 2011," he said.

"Each and every Minister in this Government is acutely aware that the plans we have in place are tough, in fact incredibly difficult, but we are clear that the alternative – indecision and delay – would mean taking unacceptable risks with our economy, our country and our people."

After a string of Liberal Democrat Ministers were caught criticising their Tory partners to undercover reporters, Mr Cameron acknowledged that coalition politics was "not always straightforward" but said both were committed to working in the national interest.

"We don't agree on everything. We never said we would," he said.

"But I believe we are bringing a new style of government. A more collegiate approach. One where we're prepared to argue things out and then act to do what we both believe is in the national interest.

"The political risks are greater this way. But so too are the rewards."

Mr Cameron said that he was continuing to approach the difficulties facing the country with the same "positive frame of mind" with which he set about forming a new government.

"By nature I am an optimist – about people, about human nature and, above all, about the future of our great country," he said. "If we sort out our problems, and make the most of our many opportunities, we can be one of the international success stories of the new decade."