First Minister Rhodri Morgan has promised Labour will fight hard against its coalition partners Plaid Cymru in May's Welsh council elections.
Mr Morgan closed the Welsh Labour conference by pledging a "no holds barred" contest with the party he sits alongside in the assembly government.
He admitted it was "really hard" to work "across political divides".
But he told delegates in Llandudno the parties had "managed to get along" to deliver policies supported by Labour.
Mr Morgan has held the top job for eight years, but retained it after last year's assembly election only by putting together a coalition with Welsh Labour's traditional opponents.
The coalition was strongly opposed by some in Labour, but he said he had to make difficult choices to deliver his party's manifesto.
"It is hard, really hard, as someone who has been in this party for 43 years, to be working across political divides with Plaid Cymru," he said.
"So far, we have managed to get along on a careful, business-like basis, focused on delivering the programme which this party endorsed in July. None of this means that we share a set of common political values or purposes."
He said Labour would take on Plaid - "no inhibitions, no holds barred" - in the key battlegrounds in the elections, when all 22 of Wales' councils are up for grabs.
He pointed to policies on the environment, education and health that are being overseen by Labour ministers in the joint Cabinet.
Mr Morgan also told delegates opponents of the creation of the assembly had been proved wrong and Wales had shown since devolution began in 1999 that could handle its own affairs "in an open and democratic way".
Mr Morgan, who plans to stand down in about 18 months, also cited rising employment as an example of success.
He told delegates that the assembly government had demonstrated it can take the big strategic decisions in health, education and the environment.
On health, Mr Morgan told the conference of ambitious investment in hospitals and other medical facilities.
On education, Mr Morgan he outlined how the assembly government planned to tackle the challenges of raising skill levels and training among workers.
Mr Morgan, who has announced he will give up the leadership around his 70th birthday in September 2009, pointed to projects - such as new hospitals and railways in the south Wales valleys - that have become a reality.
On the environment, he talked about taking difficult decisions on windfarms and working on the proposal for a barrage across the Severn.
"There is no way in which the damage inflicted on our planet can be undone without pain. But what is equally certain is that the longer we delay in making the necessary changes, the greater the pain will be."
The conference saw Gordon Brown make his first visit to Wales since becoming prime minister moving and offered a chance for Labour to rally ahead of May's local elections, when all of Wales' 22 councils are up for grabs.
On Saturday, Welsh Secretary Paul Murphy said the status of the assembly should not be allowed to get in the way of public services.
"Those are the issues that people care most about and it's delivering those services that should be our priority," he said.
"I have been called a 'devosceptic'. No, I am a devorealist."
In a fringe debate on rebuilding support for Labour in the Welsh-speaking communities of west Wales, Counsel General Carwyn Jones said some voters think of Labour as "anti-Welsh".
The Bridgend AM, a leading contender to take over from Mr Morgan, said: "We are to blame in a way. We allowed Plaid Cymru to say they are the party of Welsh Wales.
"We were that party until the mid-70s."