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Lib Dems becoming 'lazy' - Ashdown

He used his farewell speech at the party's conference in Harrogate to deliver a stern warning to the assembled delegates.

His aides described the address as a "gentle reminder" - but they admitted it was far stronger than the emotional farewell many had been expecting.

Mr Ashdown praised his replacement Charles Kennedy, stressing his "absolute confidence" in his former rural affairs spokesman.

But on policy he had harsh words for the party he has led for 11 years and is credited with having turned around.

"In some areas we are, I fear, running the risk of becoming rather lazy and complacent in our thinking," he said.

"If we Liberal Democrats will not think afresh, then we risk falling into the easy trap of leftist oppositional politics.

"And that would mean making ourselves irrelevant for a generation."

The former leader told the conference: "We have become far too staid, far too conservative - yes, conservative - in our thinking about public services.

"As liberals, our place is to be on the side of the citizen, not the state - of the consumer, not the producer."

Challenge posed by Internet

He warned the party not to allow itself to wallow in introspection as it worked out how to re-position itself under its new boss.

"We often believe that all the important questions are internal ones," he told the conference.

"They are not.

"We live at a time when the questions before us are, quite literally, of global proportions."

Although the Lib Dems are the only UK political party committed to the European single currency, Mr Ashdown urged delegates to think yet more about future integration.

"Power is accumulating, often with frightening speed, in the hands of the global players - the commodity brokers, the Internet operators, the satellite broadcasters, the multinational traders - all operating unfettered and unlimited by the structures of any government or the constraints of any ideology, or the limits of any creed or culture."

He insisted most people had not really started to comprehend the significance of this change, referring to the strength of the campaign against Britain adopting the euro.

"Yet the deputy governor of the Bank of England, speaking at a conference of central bankers three weeks ago, said that the growth of Internet trading risks making central banks completely irrelevant.

"And with them, incidentally, the capacity for exchequers to collect taxes for public expenditure - and so for governments to govern in the traditional modern sense.

"Indeed there is no reason why private firms like Microsoft or News International should not set up their own currency for Internet trading and investment. The Gates Groat. Or the Murdoch Shilling - Rubert's Rupee."

Mr Ashdown ended his speech with the inevitable tribute to his colleagues. But even at this point he had some criticisms.

"To have had the privilege to lead you has been the greatest thing I have ever done - or ever will do.

"You have been a great party to lead - which is not the same thing, incidentally, as an easy party to lead."

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