Under-fire Miliband insists: I’m ready to make difficult choices

In a keynote speech, he declared he was ready to make the “difficult choices” necessary and warned that the policies of his predecessors Tony Blair and Gordon Brown would work no longer.

With the structural deficit in public finances forecast to stretch beyond 2015, the expected date for the next General Election, Mr Miliband said an incoming Labour administration would be unable to rely on a buoyant economy to support its plans.

“It means that the Blair/Brown approach will not be enough,” he said. “Each time New Labour won an election, it won at a time when business was prospering.

“Next time we come back to power, it will be different. We will be handed a deficit. We will have to make difficult choices that all of us wish we did not have to make.

“So we must rethink how we achieve fairness for Britain in a time when there is less money to spend. It’s Labour’s responsibility to find a new approach for tough times. So we will be a different party from the one we were in the past. A changed Labour Party.”

Mr Miliband vowed to tackle the “vested interests” that have squeezed families’ living standards and threatened to legislate against energy companies which took advantage of the elderly.

But he admitted that his party might be unable to reverse Government cuts to the winter fuel allowance.

Shadow Chancellor Ed Balls later went even further, arguing that Labour could make no promises to reverse Government spending decisions if it were to win the political battle on the economy.

Close aides denied Mr Miliband’s speech was a relaunch of his leadership, in spite of falling opinion ratings and growing criticism of his performance.

In an interview only hours before his address, Mr Miliband was again forced to brush off the comments of his former adviser Lord Glasman, who said his leadership was “all c**p”.

Tory deputy chairman Michael Fallon claimed Labour could not be taken seriously on the economy until Mr Miliband produced a “credible plan” for cutting the deficit.

“If he seriously accepts there’s less money to spend,” Mr Fallon added, “he would stop making billions of new unfunded spending promises and instead tell us what Labour would cut.