Prime Minister Gordon Brown has said recent scandals to have hit the government, such as data loss and proxy donations, will be "quickly forgotten".
Mr Brown is hoping to regain the initiative in the New Year
He pledged to concentrate in the New Year on long-term goals and issues that really mattered to people such as housing, health and education.
He also rejected claims British troops had been driven out of Basra and said violence was decreasing in the region.
Mr Brown was speaking at his monthly press conference in Downing Street.
The government has seen its opinion poll ratings fall in recent weeks following a string of problems.
Asked about political donations and the loss of personal data, Mr Brown said: "I think people know that when a problem arises we will deal with it."
But he said they also wanted the government not to be "diverted" from its long-term aims.
"Many of the things that have been written about for the last few weeks would be forgotten quickly," added Mr Brown.
The press conference - Mr Brown's last major public appearance before Parliament rises for the Christmas break - was dominated by questions about the collapse of mortgage bank Northern Rock.
He said the government still hoped for a sale to a private company but no options had been ruled out - including nationalisation.
Mr Brown said: "We do not rule anything out for the future."
Northern Rock's aid package from public funds is now estimated at £57bn.
But Mr Brown said the fact that Northern Rock problems had not spread to other institutions showed the "tripartite" system - consisting of the government, Financial Services Authority and the Bank of England - designed by him in 1997 was "working well".
Bank rift denied
He also denied any rift with Bank of England governor Mervyn King and rejected suggestions that they had ignored warnings that Northern Rock was in trouble.
"The Governor and I and the chancellor are completely at one in both the way we deal with these events and analyse what's happened," said Mr Brown.
He insisted the "fundamentals of the British economy are and remain sound" despite recent financial turbulence, with inflation at 2.1% and record levels of employment.
He also dismissed demands for a U-turn over police pay, insisting it was vital to maintain economic stability.
He accepted the decision to defy an arbitration panel by not backdating the 2.5% rise to September had been unpopular.
But he said that it was "necessary to ensure the low inflation and stability of the economy that we have".
Mr Brown said he had congratulated Nick Clegg on becoming the new Lib Dem leader.
"We look forward to working together on the issues that unite our two parties and unite the country," he said.
Mr Brown added that he was sure there was common ground between Labour and the Lib Dems on constitutional reform.