In his New Year message, the prime minister vowed to press ahead with controversial reforms in health, education, energy and welfare.

He emphasised the so-called respect agenda, pledging fresh action to tackle anti-social behaviour. And Blair also pledged to continue the fight against terrorism in the UK and abroad.

Tory leader David Cameron and Lib Dem leader Charles Kennedy have also made New Year messages.

The prime minister is facing a battle to secure his political legacy in 2006, with backbenchers threatening to revolt over plans to grant independence to state schools.

Some Labour MPs are also uneasy about plans to encourage people off incapacity benefit and into work, and to increase the role of the private sector in the provision of local health services.

Blair, who is taking a winter break with his family in Egypt, listed UK strengths, including high employment and falling hospital waiting lists, and said: "Everyone in our country who has worked hard to achieve this can feel proud of the progress we've made this year.

"Our achievements are being acknowledged across the globe, a fact recognised by the international community when we won the 2012 Olympics for London.

"But 2006 is a year in which critical decisions have to be got right if we are to sustain prosperity and fast-improving public services for the long term.

"On schools, local health services, pensions, welfare, the respect agenda and energy, we face big choices which will decide how prepared we are for the challenges of the future."