Gordon Brown has urged his party not to let tough times deflect them from the "often hard... Labour road" to transform society.
Brown got a standing ovation
In a passionate conference speech, the chancellor acknowledged that there were doubts about the party's direction.
But he urged delegates to have confidence in the programme led by the prime minister and pointed to plans for further increases in public spending.
He said: "Sometimes when things look difficult, times seem hard, pressures are great.
"When some may feel that complacency has crept in, momentum has been lost or the vision dimmed.
"Then take inspiration from the unyielding determination of our pioneers: tough times did not diminish their idealism but made them even more determined that to transform lives you have to transform society."
Mr Brown, in a speech seen by many commentators as underlining his own leadership ambitions, vowed that there would be further increases in public spending, with a source close to the chancellor saying investment in vital areas would rise by 2.5% in real terms between 2006-8 on top of health
spending already planned.
The source suggested that would mean around £25 billion for areas such as education, while he said there were also plans to find more cash by moving government departments out of Whitehall and into the regions.
Mr Brown sought to address the concerns of some union leaders, promising consultation with the unions to "end two tierism in the Labour market".
And he rejected claims that New Labour is following a Tory programme, saying: "Let it not be said the political parties are all the same, that there is no difference, that voting is a waste of time, that there are no big choices left, that there are no causes for which to struggle."
The chancellor pointed to the creation of a new statutory pension protection fund to protect workers' pension rights.
He also said employees would be given new rights to information and consultation.
Mr Brown said he recognised concerns about job losses in the manufacturing industries and said he would introduce incentives in his pre-Budget report in an attempt to boost the sector.
The chancellor said: "After six years of government, I believe more than ever that the Labour Party does not exist for itself but for larger and noble purposes.
"I believe that at every point in our history, Labour needs not just a programme but a soul."
And Mr Brown echoed Mr Blair's conference speech last year saying: "This Labour party - best when we are boldest, best when we are united, best when we are Labour."
Mr Brown pledged to continue the drive towards full employment and to campaign for changes to the controversial EU common agricultural policy.
The chancellor said the government's goals included full employment, high productivity, world-class public
services, and the eradication of child and pensioner poverty.
SPEECHES THIS WEEK
Monday: Chancellor Gordon Brown
Tuesday: Tony Blair, Education Secretary Charles Clarke
Wednesday: Health Secretary John Reid, Foreign Secretary Jack Straw, Defence Secretary Geoff Hoon and Afghan President Hamid Karzai
Thursday: David Blunkett
He said he would not abandon long-term economic reform in favour of "quick fixes" and would not "succumb to Tory
He insisted it had been right to back the prime minister over Iraq. he had warned before the speech that the days ahead would test "all our mettle".
Thousands of workers from across the country staged a demonstration in protest at manufacturing job losses outside the conference.
The chancellor's speech is the highlight on a day which also features speeches from trade and industry secretary Patricia Hewitt, Environment Secretary Margaret Beckett and Deputy Prime Minister John Prescott.
In his speech, Mr Prescott issued a warning to spend-thrift local authorities that he would be prepared to cap council tax if they indulged in big increases.
And he announced that 1,600 affordable new homes would be built by housing associations on government-owned land across six counties in the south east.
Mr Blair meanwhile was attending the funeral of Lord Williams of Mostyn, leader of the Lords, who died last week.