Senior cabinet allies of Gordon Brown have warned their colleagues that they have to rid the Government of its "incompetent" image in the new year.
The call came after Jack Straw, the Justice minister, admitted that David Cameron's appeal was "resonating" with the public.
In his new year message, the Conservative leader warned against complacency. Mr Cam-eron said: "I sense that Britain feels it's time for a change. There probably won't be a general election this year but we will behave and work as though there is.
"This will be the year in which we show that there is hope for the future: that there is a clear and credible alternative to this hopeless and incompetent Labour government."
One of Mr Brown's most senior cabinet allies admitted that the priority for the Government in 2008 would be to restore credibility after a series of debacles over lost data and the illegal use of "proxy" donors to raise Labour funds which could lead to criminal charges.
"We have to knock on the head the appearance of incompetence in the Government," said the minister. "You cannot do that while working next to someone who is breaking the law over party funding or records on 25 million people go missing."
There is a tacit acceptance behind the statements that the Brown government has to make a shift in tone from its previous dismissal of Mr Cameron as "style over substance".
The Prime Minister has ordered his ministers to hit the ground running with a series of announcements attempting to show that his government has not run out of ideas. He signalled in his own new year message the controversial go-ahead to a new generation of nuclear power stations will be given within days.
Mr Brown will defy critics in his own party and Liberal Democrats who said the consultation had been a "sham" and present nuclear power as an eco-friendly way to tackle climate change by reducing harmful carbon emissions.
"Because a good environment is good economics, we will take the difficult decisions on energy security on nuclear power and renewables," he said.
Mr Straw will be bringing forward measures on constitutional reform, and electoral reform, holding out the prospect of a long-term working arrangement with the Liberal Democrats in the event of a hung parliament after the next election.
In his message to the nation, Mr Brown gave a grim prediction for the year ahead, saying Britain would face "global financial turbulence" but promised to steer a way to stability, hinting that more interest rate cuts could well be coming. He has invited Nicolas Sarkozy, the French President, and Angela Merkel, the German Chancellor, to talks in London about reforms to the financial institutions that he outlined at the recent Brussels summit.
Mr Brown answered private criticism from some ministers who fear he is focusing too much on his handling on the economy, which has failed to impress the voters. He said "economic stability alone" was not enough, and warned left-wing Labour die-hards that there would be no let-up on reform of the public services on education, transport, housing, planning, and health.