Iain Duncan Smith says the next year will see the British people lose faith in Tony Blair and turn to the Tories as an alternative government.

The Conservative leader, who said he had never considered quitting, claimed voters had so far been prepared to give Labour the benefit of the doubt after 18 years of Tory rule.

I am sustained by the fact that every single opposition leader that's gone on to win elections has had to deal with periods like this Iain Duncan Smith

"Now is the period, over the next 12 months, where we are actually able to show the government is failing and that there's an alternative," he told BBC Radio 4's Today programme.

Mr Duncan Smith's end-of-year interview came as his former chief of staff revealed she was advising a new political party created by as yet unnamed business people who previously backed the Tories.

The Tory leader said Tony Blair had promised better public services without tax rises - and while giving him a chance to see if he could deliver, the British people "were not interested" in what the Conservatives had had to say.

Mrs Thatcher

But now with public services showing little sign of improvement, and taxes rising, the Tories have the chance to put forward their alternative.

Mr Duncan Smith said every opposition leader faced criticism and poll setbacks in trying to rebuild a party, but insisted the Tories were well placed to move forward.

He's not delivering, says Duncan Smith

"It happened to Mrs Thatcher in the 1970s. For most of her period as she was rebuilding the opposition, she was roundly criticised. Polls about her personally were not good.

"There's an historical precedent, a continuing one. What I have to do is show that we have the alternative policies as a party in opposition to be the next government.

"I am sustained by the fact that every single opposition leader that's gone on to win elections has had to deal with periods like this. Every opposition leader has had to rebuild from difficult circumstances."

Low taxes

Of his first year as leader Mr Duncan Smith said: "We needed to put in place a base of policies that would give us an opportunity to take the fight to the government and show there is an alternative."

My intention is to take this party forward to take on the government, which I believe is wasting people's money on public services that Iain Duncan Smith

"The government is beginning to be seen to be spending taxpayers' money very unwisely and not delivering.

"We will be, in government, a party that is lower tax and lower regulation while delivering improvements to public services."

Mr Duncan Smith, asked if he would still be Tory leader in a year's time said: "I absolutely will be and my intention is to take this party forward to take on the Government, which I believe is wasting people's money on public services that are not being delivered in any improved quality."

Breakaway party

The interview came the day after Mr Duncan Smith's former chief of staff Jenny Ungless criticised his "unite or die" televised appeal to Tory MPs last month after a rebellion on allowing unmarried couples adopt.

Ms Ungless, who told BBC Radio 4's World at One programme she was advising a breakaway party, described it as one of the lowest points for the Conservative Party.

The success or failure of the Conservative Party is down to the Conservative Party itself Jenny Ungless

She denied that her decision to leave in July was connected to the sacking of David Davis as Tory party chairman and other reported infighting at Conservative Central Office.

Ms Ungless is to advise the New Party for Britain on political strategic issues through the PR company Foresight Communications, run by Mark Adams.

The party has been set up by a number of so far anonymous Tory businessmen who have become disillusioned with the Conservatives. It will be officially launched in the New Year.

"The emergence of a new party potentially could be a breath of fresh air in politics," she said.

"Frankly I don't think the Conservative Party should regard it as a threat in the sense that the success or failure of the Conservative Party is down to the Conservative Party itself, and not the emergency or otherwise of any other new parties."

The new party would tackle issues of most concern to voters, like pensions, public transport and the health service, she said.