By Mark Davies BBC News Online political reporter in Blackpool

A defiant Tony Blair has pledged to "quicken the march of progress" as his government seeks to reform the UK's public services.

There's nothing wrong with the old principles but if the old ways worked, they'd have worked by now

Tony Blair

In his keynote party conference speech in Blackpool's sweltering Winter Gardens complex, the prime minister said Labour was "best at its boldest - and so far we've made a good start, but we've not been bold enough".

He said there would be a "great push forward" to revive schools and hospitals and reform the criminal justice system.

Mr Blair also delivered a stark warning on Iraq, saying the UK must stand ready for war.

He was upbeat on the euro, saying it was "about our destiny" and that if economic tests for entry were met, "we go for it" on calling a referendum.

Time for 'big push'

On education, he said there would be more choice for parents, while on health, patients should be able to have operations on the NHS "at the time I want, with the doctor I want".

And in a direct message to union leaders and Labour activists unhappy about the use of private cash in public services, he declared that it was time to move on from "old ways".

'Crossroads'

"There's nothing wrong with the old principles but if the old ways worked, they'd have worked by now," he said.

"If you believe in social justice, in solidarity, in quality of opportunity and responsibility, then believe in the reforms to get us there.

Delegates listen to Mr Blair's speech

"Now is the time to quicken the march of progress - not mark of time."

Delegates gave the prime minister a standing ovation lasting nearly four minutes as he ended his speech by declaring that the "journey of modernisation" must be seen through.

Mr Blair attacked the Conservatives, but admitted his party, government and country were at a "crossroads".

"Do we take modest, though important, steps of improvement? Or do we make the great push forward for transformation?," he said.

He said Labour was best when at its boldest, saying caution could sometimes mean retreat - "and retreat is dangerous".

'Work with us'

He warned activists that attacking the government for not being perfect could see the return of the Tories.

And addressing his critics in the union movement, he said: "I say to the trade unions: work with us on the best way of delivering the service and we will work with you on ending the two-tier workforce."

He speaks with much confidence and conviction

Bob Ferguson, UK

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He underlined the extra investment being put into public services and made clear he would not be moved by calls for an independent review of using private money for public services.

"I am not going to go to parents and children and patients in my constituency or any other and say: 'I'm sorry because there is an argument over PFI we're going to put these projects on hold.

"They don't care who builds them, so long as they're on cost, on budget, and helping to deliver a better NHS and better schools."

Firm

Using private finance was not a betrayal of public services, but a renewal, insisted Mr Blair.

Let us lay down the ultimatum, let Saddam comply with the will of the UN

Tony Blair

He said it was time for public services to escape the "monolithic provision of services" created with the welfare state in 1945.

On foreign affairs, the prime minister said Middle East peace talks should be revived by the end of the year.

And he called on the conference to shun anti-Americanism, saying the UK and Europe shared the same values as the US.

Standing firm on Iraq, Mr Blair said he understood concerns, but that military action had to remain an option.

Speech won long ovation

He conceded that the "hard part" was accepting that war with Iraq was possible.

He said: "I know the worry over Iraq. People accept Saddam is bad. But they fear it's being done for the wrong motives.

"They fear us acting alone - so, the United Nations route. Let us lay down the ultimatum, let Saddam comply with the will of the UN."

Upbeat on euro

Mr Blair told his audience: "So far, most of you are with me but here is the hard part. If he doesn't comply, then consider... sometimes and in particular dealing with a dictator, the only chance of peace is a readiness for war."

If the tests are passed, we go for it

Tony Blair on the euro

He also reinforced his message that the UK will hold a referendum on joining the euro if key economic tests are met.

And he vowed: "If the tests are passed, we go for it."

Mr Blair repeated his desire to rebalance the UK's criminal justice system in favour of the victims of crime.

"Old rules will be swept away; court procedures simplified; sentencing built round the offender as well as the offence, with those on drugs getting treatment or custody," he said.

On education, Mr Blair stressed his widely-trailed view that it was time to move to a "post-comprehensive era" with more choice for parents and children backed by the principle of equality of opportunity.