Here are some key quotes from his speech.

I've worked with Tony Blair for almost 10 years as chancellor - the longest relationship of any prime minister and chancellor in British history.

And it has been a privilege for me to work with and for the most successful ever Labour leader and Labour prime minister.

Building new Labour and winning three elections, he recognised what we must never forget that we must always be in tune with the aspirations, at all times on the side of the British people.

We cannot tolerate second-best investment in our schools.

And, step by step, we will raise investment in state school pupils now �5,500 per pupil to today's level for private school pupils - �8,000 a year.

And I make this challenge to all parties - if you believe, like us, in equal opportunities in education, support my priority for the future: invest in education first.

I want a Britain not just of excellence in education but a Britain of full employment and an end to the dole as we know it.

My father was a minister of the church.

His motivation was not theological zeal but compassion.

He told me "you can leave your mark on the world for good or ill".

And my mother taught my brothers and me that whatever talents we had, however small, we should use them.

I don't romanticise my upbringing.

But my parents were more than an influence, they were - and still are - my inspiration. The reason I am in politics.

When some people say as they do, why all that modernisation? Why all these New Labour reforms? Why continue to change?

I tell the country:

This is not reform for reform's sake but reform to deliver the best service possible, and Britain cannot lead the world by standing still.

Let me promise, as a government, as John Reid and Des Browne have said, we will take any necessary steps and find all necessary resources to ensure whether in Iraq, Afghanistan or anywhere else there is no safe haven for terrorists and no hiding place for terrorist finance.

But we also know that we must isolate these murderous extremists and we will do so best when we, the British people, mobilise the essential decency and moderation of all our communities and win the battle of ideas for hearts and minds.

In 1997 we inherited a Britain of economic instability, unemployment and chronic underinvestment in public services.

Now from being one of the most unstable economies, Britain is today seen around the world as the most stable economy in the industrialised world.

With 2.4 million new jobs - instead of the highest unemployment in Europe - we are closer to full employment than ever before.

And our economic strength has allowed us to do what no government has ever achieved so quickly: to double investment in health, in education, policing, and transport.

Our prudence - yes, she'll always be around - was and is for a purpose.

It will not be a surprise to you to learn I'm more interested in the future of the Arctic circle than the future of the Arctic Monkeys.

Some see politics simply as spectacle.

I see politics as service because it is through service that you can make a difference and you can help people change their lives.

I know where I come from, what I believe and what I can contribute.

I am confident that my experience and my values gives me the strength to take the tough decisions.

I would relish the opportunity to take on David Cameron and the Conservative Party.

And in that endeavour I would be determined to draw on all the talents of our party and country.

And why?

Because I know that in Britain today there are great causes left, noble purposes worth fighting for, a progressive future still to be built, and this is the task that falls to our party and our government.