Opening the Labour conference in Bournemouth, he said the party must reject "the soft option" of becoming "the natural party of opposition".

With the leadership under pressure on a range of issues from student tuition fees to the war in Iraq, Mr McCartney acknowledged that the party faced "fundamental challenges".

Labour conference speeches: Monday: Gordon Brown Tuesday: Charles Clarke; Tony Blair Wednesday: Afghan President Hamid Karzai; Jack Straw; Geoff Hoon Thursday: David Blunkett

And he hinted that Labour is planning for a general election in 18 months, saying the party could not spend the time before the poll "talking itself into another 18 years of Thatcherism".

He said: "This week the leadership needs to show that we are in touch and we are implementing Labour values in government."

Echoing what is expected to be one of the central themes of the conference - putting policies to a "fairness test", he went on: "This week our policies will need to be judged on our own test of fairness - economic and social justice."

He said Labour had to accept the challenge of becoming "the natural party of government".

'Powerlessness'

And he warned that failing to meet up to the challenge could allow the Tories back into power.

"We need to agree that we'd rather face the difficulties of government together, than the powerlessness of opposition," he said.

Mr McCartney reminded delegates of the speech by former party leader Neil Kinnock 18 years ago in Bournemouth in which he took on the Militant Tendency in the party.

He said Mr Kinnock "gave us the courage to get off our political deathbed and throw away the yoke of self-indulgence, reclaiming our dignity from a rabble which was junking the values and aspirations that brought this party into being."

He said Labour members should not forget what he said had been its achievements in government, such as the introduction of the minimum wage.

"That's why we've got to draw a line under our differences and focus on the next milestone and the next milestone after that," he said.

The message was echoed later by Commons leader Peter Hain, who said Labour must "celebrate its strengths...while respecting our differences".

He said the party would not always agree with the trade unions, but the relationship "must never, ever fall apart".