Labour will on Monday launch an attack on the coalition over falling living standards in Britain as the party leadership seeks to soothe internal jitters about Ed Miliband's strategy.
The lead in the polls for Labour has shrunk to its narrowest for 18 months amid signs of a strengthening economy and renewed confidence within the Tory ranks.
While Mr Miliband is considered unassailable as party leader in the run-up to the 2015 general election, even some of his former supporters are apprehensive about their prospects.
A poll from YouGov on Thursday gave Labour a lead of five points, meaning the party is at its lowest ebb since January 2012 after David Cameron's veto of the EU's fiscal pact.
"The Australians have changed their leader and have surged from -12 in the polls to plus 2," said one former senior Miliband supporter.
Since Kevin Rudd became leader of Australia's Labor party six weeks ago, his party has closed the gap on the opposition. Newspoll shows the party trailing the conservative Liberal coalition 48 per cent to 52 per cent - a marked improvement on the 14 percentage point gap under Julia Gillard.
"It's still not clear what [Miliband] stands for, what he wants to do if he ever gets into Downing Street," said the former Miliband supporter. "Morale is bad."
Many Labour MPs went away for the summer recess concerned that Mr Cameron had seemed to win the upper hand in Commons' skirmishes.
And while Mr Miliband has sought to set out more centre-ground positions on the economy and welfare - described as "defensive" moves by allies - the party has looked vulnerable on both issues.
"What you have seen over the last six months is Ed doing really heavy lifting and hard yards needed to build a platform for 2015," said one ally. "We have addressed the issues which are perceived to be most problematic for us, such as immigration, social security, the economy, links with the unions."
While admitting it had been a "tough" period for Labour, he said the Conservatives were still vulnerable to charges about being out of touch and standing up for the wrong people.
Monday will see Labour's shadow Treasury team claim that the average family is now "out of pocket" compared with 2010.
Polling conducted for Labour by YouGov shows 70 per cent of voters believe recent improvements in the economy have not benefited middle- and lower-income families, with just 10 per cent saying they have.
Yet slight signs of green shoots in the economy have only added to the sense of unease in the opposition party.
"There's a lot of nervousness around about the economy," says one front bench Labour MP. "There are concerns about whether we'll have to shift our narrative if things continue to pick up, and refocus on issues like fairness rather than economic despondency."
Much of the criticism has been in private but George Mudie, a Labour backbencher, went public last week saying: "I have difficulty knowing what we stand for now."
Mr Miliband has reined in some of his left-leaning, anti-cuts, green instincts in recent weeks by accepting the need for some spending cuts and a somewhat less generous welfare state. But many MPs sense a lack of conviction in both messages and fear the coalition is setting the political weather.
They describe a party leader who lacks close allies inside his shadow cabinet while preferring to rely on his close-knit team of advisers and his old university friends.
One former backer of Mr Miliband predicted that the party would lose in 2015. "There aren't that many people who realistically believe that we are going to win, and those who do are deceiving themselves," he said. "We're just not sounding credible on the right issues."
YouGov research suggests that voters believe Mr Miliband understands their day-to-day concerns better than Tory leader Mr Cameron.
Yet its survey last week found 94 per cent of Tory voters think Mr Cameron would make the best prime minister while only 55 per cent of Labour voters think the same of Mr Miliband.
"When it comes to George Osborne versus Ed Balls, it is a bit of a least ugly contest," said Anthony Wells, director of YouGov. "But if you put Cameron and Miliband against each other, you have a great big lead for Cameron in terms of leadership."
Mr Mudie recalled the run-up to the 1997 election when Labour felt "bubbling" and "energetic": "We were at them, we thought we had all the answers."
Now, he added: "We're not at them and we're slightly hesitant and we're slightly confused and I deeply worry about that."