Britain is on the move, says upbeat Blair

Prime Minister calls for school leaving age to be raised to 18 and claims public services are better than ever

Britain is winning, its economy is thriving, and its public services are getting better and better, Tony Blair declared yesterday. And anyone who says the country is going to the dogs is doing the Tories' dirty work.

Mr Blair's upbeat message to the Labour Party spring conference may have taken some of his listeners by surprise, after he had opened his speech with a ringing condemnation of the Madrid bombings.

He promised that the war against terrorism "will be won and this menace driven from the lives of decent people the world over". In his next sentence he said: "It is great to be back in Manchester," and added: "Britain is winning. Every day its prospects get better, its hopes better able to be fulfilled. We should be proud of our country, proud of its people, proud of what together we are achieving."

He accused the Tories of trying to spread the idea that Britain is failing. "National pessimism is not an accident. It is their strategy," he claimed.

He said that he wants the school leaving age to be effectively raised from 16 to 18, with teenagers either staying on in the sixth form or taking up a modern apprenticeship or job-related training.

But last night it was revealed the Department for Education and Skills (DfES) had considered allowing private companies to take over state schools and run them for a profit. A memo from a "ministerial stocktaking meeting" held in January and chaired by Mr Blair's education policy advisor, Andrew Adonis, suggested looking into "different sponsorship models, for example, a commercial profit-making model", claimed The Mail on Sunday. Last night the DfES admitted the scheme had been discussed.

Despite the Prime Minister's show of optimism, Labour activists at the conference are braced for a poor showing in the elections in June to local councils and to the European Parliament.

Mr Blair referred jokingly to his own U-turn in having the Mayor of London, Ken Livingstone, hurriedly readmitted to the Labour Party, which expelled him four years ago, so that he could be their candidate in the London election.

"Here's three words you never thought you'd hear me say ­ Vote For Ken," he quipped. The party faithful gave him a rapturous reception.

But outside, thousands had gathered to demonstrate against the Iraq war. As expected, Mr Blair made no mention of Iraq, in his speech.

Matthew Taylor the Liberal Democrat chairman, said: "The Prime Minister clearly cannot understand that people are proud of this country but not proud of his government."