Howard was in relaxed mood

Party leader Michael Howard said it was a choice between the Tories' controlled spending and Labour's tax rises.

Co-chairman Liam Fox promised voters the party would end the "intruder state" ushered in by Labour.

Senior officials announced plans to extend their flagship policies to give patients and parents more choice.

But Deputy Prime Minister John Prescott insisted: "The choice before the British people is now clear - cuts, charges and privatisation under the Tories or investment and reform with Labour."

Mr Howard is due to address the conference on Sunday. But he gave a clear indication of his speech when he arrived at the venue in Harrogate with his wife Sandra.

He said it was "a choice between a Conservative government that will keep spending under control and a Labour government that will introduce third term tax rises".

Not only is it possible to see that we will win the next election, it is actually hard to see how we will lose Lord Saatchi Conservative co-chairman Fox pledges less state control Howard meets party faithful

"A Conservative government that trusts people and will give them control, and a Labour government that believes that big government is best."

Earlier representatives heard a tough anti-drugs message from shadow home secretary David Davis who pledged to reverse the government's "foolish" down-grading of cannabis.

He said drug-related crime cost the country �25bn a year - bigger than the education budget.

Extended choice

Opening the conference Liam Fox told confident delegates the party was on the brink of returning to power.

He said that under Mr Howard's leadership the Conservatives had rediscovered their self-confidence with 20,000 new members, more funds, and a "streamlined, more disciplined" organisation.

"At last, we look like a party which can once again effectively govern our country," he said.

Some people say we've lost the war on drugs but Labour haven't even begun to fight it David Davis Shadow home secretary Tories 'would change drug laws' Young Tories make their case

Education and health spokesman Tim Yeo announced that plans to allow parents to get cash from the state and take it to the school of their choice under their schools passport proposal would apply to the whole of England and Wales and not just inner cities.

Similarly in health, patients' passports would allow people to get a state subsidy towards treatment in charitable or private hospitals.

This would not just apply to one million waiting for acute operations but 17m suffering from a range of long-term illnesses including diabetes, asthma and kidney disease.

In his fringe meeting address, Lord Saatchi said the message was clear.

"Not only is it possible to see that we will win the next election, it is actually hard to see how we will lose," he said

The choice before the British people is now clear - cuts, charges and privatisation under the Tories or investment and reform with Labour. John Prescott

"It is in our hands to do it."

But Deputy Prime Minister John Prescott said the Tories had lost "none of their extremism and none of their arrogance".

"Michael Howard, Oliver Letwin, Liam Fox and Maurice Saatchi all openly proclaim they want a return to Thatcherism.

"Under Michael Howard, the Tories are more extreme than ever."

Before Mr Howard speaks on Sunday, representatives will hear from shadow foreign secretary Michael Ancram and then the leader of Tory MEPs, Jonathan Evans.