David Cameron knows this much. If the Conservative party is ever to be re-elected, he must first mould it into an effective opposition. In a thoughtful speech yesterday and in an interview with the Financial Times this week, the Tory leader demonstrated how far he has come. He has further to travel.

The speech offered a lucid analysis of the UK's economic vulnerabilities as well as well-aimed criticism of the government's handling of the collapse of Northern Rock. It pointed to a depth and definition critics say Mr Cameron lacks.

His emphasis, too, on the need to cut excessive levels of government borrowing - at the expense of a pledge to cut taxes - should be applauded. If he is serious about repairing the public finances, the Conservative leader will need to resist pressure from the party right for seductive giveaways.

Though he does not have all the answers to the questions posed by the global credit crunch, Mr Cameron is attempting to grapple with the crisis. Somewhat belatedly, he has skewered the government for dithering over the nationalisation of Northern Rock, and for its hubristic claim to have ended "boom and bust".

Nevertheless, after the mistakes of the late 1980s and early 1990s that culminated in the UK's exit from the European exchange rate mechanism, Mr Cameron has some way to go to restore public belief that the Conservatives can manage the economy. He stands exposed for contradictory policy statements and questionable judgment. For example, his initial reaction to Northern Rock's nationalisation was to characterise it as a disastrous throwback to the 1970s. It was nothing of the sort.

He has also committed the Tories to renegotiating the European Union social chapter, vowing to restore Britain's "opt-out". Mr Cameron sees this as a way to appease the eurosceptic right. But it is an empty gesture. The policy risks alienating EU partners, while the chances of renegotiation would be virtually nil.

It is hard to reconcile a professed desire to be pro-business - and oppose excessive red tape and taxes - with Mr Cameron's insistence that the Tories should not be seen as the traditional party of business. What exactly is the difference?

The leader of the opposition is right to argue that credible opposition is an essential precursor to government, and to uniting a fractious party. His guerrilla tactics, evident at the House of Commons despatch box, have so far made him a more successful opposition leader than his predecessors, but there is a limit to how far he can go on this track.

A focused attack on the government's economic record will benefit the Tories, especially if voters feel the pinch from higher inflation and mortgage rates. But Prime Minister Cameron will have to cut a more consistently substantial figure.