"We are going into a decade that perhaps is going to be very difficult... we are not going back to this boom period that led up to the crisis.

"For that reason people have to feel a sense of fairness."

He said that meant that the income tax threshold should be raised to £10,000 to take the poorest out of paying tax. And that the richest should pay more.

"It's not just for the sake of fairness, it's so that people feel, in difficult times, they all belong to the same society. That we are in this together. And that is the core of our message."

Cable said he was sure Mr Eldridge, a city councillor since 2004, would win the seat whenever the election was held.

"The polls fluctuate from week to week, 20% [for the Lib Dems] is not bad," he said.

"But it can mean a little or a lot.

In 1983 the party had 26% of the vote but got 23 MPs, in 1997 it got only 16% but returned 46 MPs, he said.

That was why the party had to focus ruthlessly on areas it could win.

"The feedback we are hearing of our own is that we are in a very strong position to make significant gains, particularly in the north of England in Labour held areas.

"We have the potential to do very well."

He said a mixture of "good management and good luck" mean the prospects for the election were good.

"The [TV] leadership debates - our arguments will be heard, we will not just be a small party trying to get into the political debate.

"We have seen recently all the arguments about the Iraq war.

"But what will be the key issue is the economy.

"My job is to make sure that the right message get across."

He compared the British economy to a patient that had had a massive heart attack. 

All the "unorthodox action" of printing money and huge levels of government debt had helped stabilise the patient he added.

"That's why we are bumping along the bottom, it's good news. It's better to be alive than dead.

"Any idea that the british economy can go back to business as usual is fantasy.

"What's happened is very deep. There is real weakness that is yet to emerge.

"Without frightening people we need to spell out what needs to be done."

He said things like tax credits for those earning over £50,000, and the replacement of the Trident nuclear deterrent were no longer affordable.

He said bureaucracy would also have to be cut.

"It has got to be done in a sensible and measured way."

The huge banks would also have to be split up, to make sure normal banking activities were separated from "casino" style practices.