Sir Menzies Campbell has called for the private sector to have a bigger role in running public services in a personal manifesto promising stronger leadership if he succeeds Charles Kennedy.
In a 5,000-word statement of aims and values, Sir Menzies backed modernisers who want to shed the Liberal Democrats' high-tax image and made clear he saw no future for them as a statist, leftist party.
Mr Kennedy was accused of sitting on the fence in the struggle between the party's two wings. In a deliberate contrast, Sir Menzies pledged: "I will work tirelessly to cement the unity of the party. But unity must not come at the price of clarity, we must be clear in all that we say and do."
The front-runner in the Liberal Democrat leadership race insisted the party could bounce back from the turmoil caused by Mr Kennedy's enforced departure and revelations about the private lives of Mark Oaten and Simon Hughes.
Promising to "reassert our credibility and authority", Sir Menzies said: "This movement has been fighting for liberalism for a century and a half. A great cause is not going to be destroyed in a month and a half."
Although Mr Kennedy sought compromises to unite the party's two factions, dubbed the social and economic liberals, critics claim he left voters confused about what the party stood for. Sir Menzies said: "Above all I intend to be a leader promoting the unity, authority and purpose of our party."
He gave a firm nod of approval to the party's so-called Orange Book brigade, who want a greater injection of market forces into public services. "Liberals and Liberal Democrats should have no philosophical problem with the private sector - or voluntary and community sector - involvement in delivering better services provided this is not allowed to compromise the basic principles of universally accessible public services," he said.
"We must not allow ourselves to think that only state provision can deliver liberal solutions. When the centralised state fails to deliver, it is those who cannot buy out or move out who suffer most." But he was sceptical about exaggerated claims about the private sector's virtues, saying it was notoriously difficult to apply market forces to core public services.
Calling for the rise in public spending under Labour to "level off," Sir Menzies said: "I am clear that there is now no great public mood to increase the overall burden of taxation."
Chris Huhne, who is also in the leadership race, won the backing of three more MPs yesterday - John Leech, Roger Williams and Mark Williams. His backers believe that he is now in second place.Reuse content