Gordon Brown attempts to bolster Labour confidence
Gordon Brown has urged Labour to "have confidence" in policies which he said would "persuade" voters to back the party at the next general election.
He told activists meeting at Warwick University that there was a "brighter future" for Labour, despite its Glasgow East by-election defeat.
But the Scottish National Party, which overturned a 13,507 majority, claimed its win was "off the Richter scale".
Conservative leader David Cameron urged Mr Brown to call a general election.
"I think we need change in this country, and that's how change should come about," he said.
However, Liberal Democrat leader Nick Clegg said it was not "time to play politics with people's lives" by calling an election "when so many people are worried about the price of a loaf of bread, how to fill their car with a tank of petrol".
Mr Brown, who has to call a general election by June 2010 at the latest, appeared to suggest he would not go to the country soon.
Attacking the Conservative Party's policies, he said he did not want "to wake up 24 months from now" to see education and health budgets cut, at the same time as "massive tax cuts" for the rich.
David Cameron calls for a general election
The prime minister appeared to speak without notes during his address to Labour's National Policy Forum at Warwick University.
In what will be seen as an attempt to boost morale, he said there was "a brighter future that we can build".
He added: "Have confidence that not only do we have the right policies but that when the time comes we will be able to persuade the British people."
The SNP won Glasgow East - previously considered one of Labour's safest seats - by 365 votes, achieving a 22.54% swing.
It followed Labour's recent loss of the Crewe and Nantwich seat, the London mayoralty and poor results in local elections.
'Cost of living'
John Mason, the SNP's winning candidate in Glasgow East, said: "Three weeks ago the SNP predicted a political earthquake.
"This SNP victory is not just a political earthquake; it is off the Richter scale. It is an epic win and the tremors will be felt all the way to Downing Street."
Will it add to the pressure on Gordon Brown? Of course
SNP leader and Scottish First Minister Alex Salmond said: "It was in their third [Labour's] safest seat in the whole of Scotland. That was the test of strength, and it was London Labour that was found wanting and the SNP in Scotland that emerged victorious."
Paul Kenny, leader of the GMB union, said the prime minister should face a Labour leadership contest in the autumn.
He added that a "strong decision", either to back Mr Brown or reject him, was needed ahead of the next general election.
But Chancellor Alistair Darling told BBC Radio 4's The World at One that Labour had to "concentrate on getting the right policies to support people through what are undoubtedly difficult times" and "articulate the reason for our existence in the first place."
Earlier, Scottish Secretary Des Browne said people did not vote for divided parties and urged Labour to "unite" behind Mr Brown.
At the Warwick University conference, the unions, which now account for the vast majority of Labour funding, are reportedly putting about 100 demands on issues ranging from new rights for workers to free school meals for all primary school pupils.
The three-day forum will be considering new ideas and amendments to current policies.
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