Tony Blair has said he will not retreat to the "political comfort zone" because he has never been "more confident" that his reform plans are right for the UK.
Mr Blair said he was "battling on all fronts" to bring about education, welfare and pensions reforms, adding: "Of course it's going to be tough."
New Labour was setting the political agenda, with the Tories' only big idea to become more like them, he said.
Mr Blair was speaking at his last Number 10 media conference of 2005.
'Politics of aspiration'
The hour-long session came as MPs begin their festive break.
Mr Blair, who faced questions on a wide range of subjects including Europe and schools, said his reform plans were about "enabling" people and not about "directing or controlling" them.
After big investment in public services, the next step was about the "politics of aspiration", with people feeling that in return for the money they put in as taxpayers, "they have more power over the system", he said.
Turning to his controversial education reforms, which are likely to be the subject of a Labour rebellion, Mr Blair insisted that the plans "specifically forbid a return to selection".
He said Chancellor Gordon Brown supported the education White Paper and the public service reform agenda.
"It's not an agenda that could possibly be done without the full support of the Treasury," he said.
Mr Blair also insisted that his party was not going to return to fighting old class war battles, following a comment by John Prescott that Labour was always at its best when it was fighting a class war.
"Anybody who knows John knows you have to distinguish what is said with a sense of humour and what's said and meant," said Mr Blair.
"I don't think anybody in the Labour Party is interested in doing that."
Mr Blair was also forced to defend his part in brokering a deal on the EU's next seven-year budget which will see £1bn a year being shaved off the UK's rebate.
The Tories do not dispute the figures, but point out that the distribution is uneven, with the cost to Britain rising from £500m in the first year of the deal to £1.9bn in the last year.
They say this will make the next budget round even harder to negotiate.
But Mr Blair said: "The purpose of the agreement was quite deliberately to backload it so that we got a reduced liability in the early years.
"After 2013 there's then a re-negotiation of the next financial perspective and of course the circumstances... will be completely different."
Mr Blair said giving up part of the rebate was "one of the things you have to do despite the fact you get slammed for doing it".
Without making that concession, Britain would have been "blamed for the budget crisis in the EU".
It would also have been blamed for the fact central and eastern European countries would have been unable to access additional funds, he said.