Douglas Alexander has told the BBC he remains "pretty optimistic" about Labour's chances at the next general election despite continuing poor polls.
The international development secretary is in charge of planning his party's campaign for the election.
He denied that the G20 summit was the last chance to avoid a "hammering" and said the recession "had changed the rules of the game".
A YouGov poll for the Sunday Times suggests the Tories have a 10% lead.
But Mr Alexander told The Andrew Marr Show on BBC One that the polls were "very volatile" at the moment.
He said the UK was in "uncharted waters" and said there were opportunities for "centre left parties like Labour to say there are limits to markets and that markets need morals".
He said he believed Labour had a "compass" for the way ahead while the Conservatives did not "have the solutions the country needs".
He said that was why "ultimately I'm pretty optimistic despite the challenges we face".
Mr Alexander was speaking as the latest opinion poll suggested Conservative support stood at 41%, with Labour on 31% and the Lib Dems on 17%.
The YouGov poll - for which 1,840 British adults were interviewed on March 12 and 13 - also suggests 59% of voters believe David Cameron is doing a good job as Conservative leader compared with 35% who believe Gordon Brown is doing a good job as prime minister.
A general election can be called by Mr Brown at any time up to June 2010.
Most expect the election to be held in spring 2010, but there have been persistent suggestions that a successful G20 summit at the start of April could lead to Mr Brown deciding to call an election in May - or to coincide with the European elections - in June this year.
It was put to Mr Alexander that the G20 was Labour's "last hope of not being hammered". But he brushed that off, saying that the G20 summit mattered because of what it can do to help the UK and global economies.
He said that a similar summit in 1931 had failed to reach agreement on international action "and we all know what happened" afterwards, referring to the spread of protectionism and the depression of the 1930s.
On Friday Conservative leader David Cameron, whose party has been calling on Mr Brown to apologise for policy failures over debt and bank regulation, said he was sorry for mistakes his party had made in the years before the credit crunch.
He said he did not think the Conservatives did enough to warn about the rising levels of corporate debt, banking debt and borrowing from abroad and said there were other areas of economic policy where "we would have done it differently if we had our time again".
Mr Cameron said Mr Brown was unable to make a "clean break" with the past because he was "in denial".
He said Mr Brown believed "a fundamentally sound economy has been hit by an external financial juggernaut, that Britain is just the innocent victim of a banking crisis that 'came from America'".
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