Gordon Brown today vowed to do "whatever is necessary" to help people struggling with rising food and fuel prices in the wake of Labour's catastrophic defeat in the Glasgow East by-election.
The Prime Minister, who earlier brushed off a call by Tory leader David Cameron for a General Election, insisted that he understood popular concerns at a time of global economic problems.
Chancellor Alistair Darling, speaking on BBC Radio, responded to the poll results by insisting that Mr Brown was still the best man to lead the party.
Mr Brown addressed Labour's National Policy Forum at the Warwick University campus in Coventry, and promised new measures in the coming weeks to help people cope with the pressures of energy costs.
"We understand and we hear people's concerns," he said.
"We will do whatever is necessary over the next few months to help hard-working families through these difficult times."
Mr Brown praised Margaret Curran, the defeated Labour candidate in Glasgow East, saying that she had fought an "excellent" campaign.
He stressed that with oil prices having trebled over the last two years and food shortages pushing up prices, he said that every country in the world was affected by the current economic difficulties.
"Coming from ordinary families as we do and have done, we know what it is like when people go to the supermarket and find that the price of milk, and the price of bread, and the price of eggs have gone up dramatically in recent months," he said.
"We know that our role when facing global economic challenges is to be on the side of hard-working families, on the side of the people of Britain."
Mr Brown promised that the Government would introduce further measures over the coming months to help people with the current economic difficulties.
"We know that, while the problem is global, it affects people in every local community," he said.
"And that's why, over the next few months, we will see in housing and in gas and electricity bills and in energy, us doing more to help the hard-working families of this country."
The Prime Minister, appearing relaxed and speaking without notes, said global demand for energy resources was outstripping supply.
And he said the first "big policy change" is to reduce dependence on oil.
"It's good for the environment, it's good for people, it's good for the energy security of the world," he said.
Mr Brown said the way to keep up with the rest of the world was to invest in people's skills.
"The key to how we survive is by investing in the people of our country," he said.
Mr Brown said that if the Tories were elected they would push through a £12 billion tax cut paid for by cuts to health, education and other frontline services.
"I don't want to wake up and find that there are massive tax cuts being given to the fewest and the richest and the wealthiest people of this country at the expense of cutting the public services of this country," he said.
He ended with a rallying call to activists to have confidence in the party's values, "whatever the setbacks and difficulties" that lay ahead.
"Whatever these difficulties, have confidence that not only do we have the right the policies, but when the time comes we will be able to persuade the British people," he said.
Chancellor Alistair Darling, speaking on BBC Radio 4's The World at One, insisted that Mr Brown was still the best man to lead the party.
"I believe that Gordon Brown is the best Prime Minister. He is the best leader of our party. He has a very clear sense of direction where he believes we as a country ought to go," he said.
Universities Secretary John Denham said that simply changing leader would not solve the concerns that led voters to turn against Labour.
"What I think would not help us at the moment is to have that sort of debate. I don't think chopping and changing leaders addresses those concerns. I think it is a bit of illusion," he told BBC News 24.
"We have got to show that on the things that really matter to people, we are going to deliver the goods."
Communities Secretary Hazel Blears was also supportive of the Prime Minister, and said the Glasgow by-election was an example of "people hitting out at the Government" about the current state of the economy.
She said: "The easy thing to do in times that are tough - and times are tough - is for a party to cut and run. That's not the Labour Party and that's not Gordon Brown.
"I think this election result is a very bad result for us. It's very difficult, but I think it's about the economy."
Outside the conference, members of local Conservative groups gathered to demonstrate their opposition.
Wearing Gordon Brown masks and carrying placards which read "Back to the old days," and "Back to the 70s with Labour", the group watched silently as Mr Brown was greeted with applause.
Kieran Bruggy, from the Coventry Conservative Association, said: "We came along to remind them that we are a vibrant Opposition who are a government in waiting and we are waiting to take control of Downing Street again.
"In Glasgow East, Labour has lost one of their safest seats. This quite clearly shows that people are very concerned about the economic crisis that we face."Reuse content