Her comments, made during a live televised Sky News debate with the other three contenders, will be seen as a plea to members not to elect left-winger Jeremy Corbyn, who her supporters believe would hand David Cameron an opportunity to seize control of the centre ground.
An unscientific survey of 8,000 viewers for Sky found a large majority felt Mr Corbyn had won the debate, with 80.6 per cent naming him, against 9.1 per cent for Ms Kendall and 5.7 per cent for Yvette Cooper and just 4.6 per cent for Andy Burnham. This marked a sharp increase in support for the Islington North MP over the course of the show, after almost 67 per cent of those voting said at the outset that they wanted him to win.
Mr Corbyn won loud applause as he called for Labour to reject the Conservatives’ austerity programme and ensure that the poorest and most vulnerable were not made to pay for the mistakes of the bankers.
But Ms Cooper told him he was “offering people false hope” with his plans for more quantitative easing to fund investment.
“Once the economy is growing, if you simply keep printing money, that pushes up inflation and that money still has to be paid back”, she said, insisting that Labour must offer a “credible” economic alternative to Conservative cuts.
Mr Corbyn retorted that Labour should not go into the 2020 general election promising more cuts, insisting: “I say, invest to grow.”
Mr Burnham warned that Labour had “drifted away” from people in England and Scotland, who saw it as too “London-centric” and switched to Ukip or the Scottish National Party. He said Labour had failed to offer a clear alternative to austerity at the election because it was unwilling to propose tax rises, and had “lost sight of its principles” in opting to abstain in a vote on cuts earlier this year.
He warned that Labour would be making a “terrible mistake” if it indulged in infighting following the leadership election, rather than maintaining its fire on the Tories.
And Ms Kendall warned: “Let’s get real. The Tories want to wipe us out, and the minute the new leader is elected they are going to throw everything at us.
“They are trying to take our politics, claiming they are the One Nation party and the party of the low-paid. We know they are not, but they know they won’t be re-elected if they are still seen as the party of the privileged few.
“They want to take our money and our funding from trade unions ... and they are going to change the constituencies, reduce the number and do it on individual voter registration, which they are bringing forward by a year. They are going to whip up English nationalism, aided and abetted by the SNP.
“They want to wipe us out and we’ve got to get real, we’ve got to go back on the attack against the Tories. They are going to bring it on and we need a strong Labour leader who understands what they are going to do and is going to fight back for Labour so we can win in 2020.”