'Doubting' Lib Dems in test of nerve: Senior figure says conference must set party's direction. Stephen Goodwin reports

THE Liberal Democrats face a 'test of nerve' at their annual conference in September, a senior party figure warned yesterday.

Tom McNally, a long-serving member of the Liberal Democrats' executive and a former MP, said Mr Ashdown's speech to the conference had assumed great importance. 'He is going to have to put spirit and resolution into his own troops while sending the right message to the country and to Mr Blair.'

Mr McNally was critical of his party colleague Lord Rodgers of Quarry Bank, who lavished praise on the new Labour leader. He said that to say Mr Blair was the man to lead Britain into the second half of the 1990s and beyond was 'just a tad premature'. Liberal Democrats should have 'self-confidence' in their own party.

But Lord (formerly Bill) Rodgers and two other 'Gang of Four' figures - Baroness (Shirley) Williams and Lord (Roy) Jenkins - who have advocated closer co-operation with Mr Blair, also came under attack from Labour, the party they left in 1981 to found the SDP.

Jack Straw, who managed Mr Blair's leadership campaign, said Labour would not be hanging out any flags for the return of former SDP members.

'It's a bit rich for the people who left the Labour Party and then waged war on it, not on the Conservative Party, for 12 years . . . now to say 'ah well, the Labour Party's changed, we'd like to be welcomed back'.' They had come close to destroying Labour in 1983, Mr Straw, an environment spokesman, said on BBC radio news.

He acknowledged that Labour's position had changed on nuclear weapons, Europe and trade union influence - the main issues which caused the Gang of Four to leave the party - but said policy differences remained, particularly on workers' rights.

The undying hostility in sections of the Labour Party to the SDP founders (who also included Lord Owen) was exemplified by Dennis Skinner, left-wing MP for Bolsover, who said the Gang of Four could see an election-winning train leaving the station and they wanted to be on it.

'They always believed that they were born to rule and that the Labour Party couldn't win without them,' Mr Skinner said. 'Well we've got news for Bill Rodgers. We don't need him.'

The compliments paid to Mr Blair by the peers have increased the pressure on Paddy Ashdown as he prepares for the Liberal Democrats' annual conference in Brighton. After a succession of by-election successes, the party bandwagon stalled in the European elections - save in the South-west - and Mr Ashdown has appeared rattled by the way Mr Blair's accession has dictated the political agenda.

Mr McNally told the Independent that the Liberal Democrat leader would have to counter the tendency to 'self doubting' and put some resolution into party members. 'It would be foolish to imagine that the conference isn't going to be a test of nerve and direction for the party.' Liberal Democrats had nothing to be apologetic about, he said. Between 20 and 25 per cent of the electorate regularly voted for the party, it had more than 100,000 members and was financially sound. 'It isn't a moment to suddenly have great attacks of angst or wish we were somewhere else.'

An adviser to James (now Lord) Callaghan when he was prime minister, Mr McNally made the political transition from Labour MP for Stockport South to the SDP and then became a founding Liberal Democrat. He did not want the party to appear 'simply Tony Blair's poodle', though he thought he would be an 'excellent' leader of the Labour Party.