Labour and Gordon Brown have continued to fall sharply in the polls despite signs that the collapse of economic confidence may have bottomed out.

The latest Populus poll for The Times, undertaken at the weekend, shows that the bounce in Mr Brown’s ratings after the banking rescue has now been largely wiped out. Labour has dropped by 5 points to 28 per cent since last month, its lowest level for nearly six months. This is still above the low of 26 per cent last summer

The Tories have slipped back 1 point since early January however to 42 per cent, still 4 points fewer than their peak last year. The Liberal Democrats are up 3 points to 18 per cent, their highest level since late August. Other parties, including the Scottish Nationalists, the Greens, the UK Independence Party and the British National Party, have also gained 3 points to 12 per cent.

The decline in public confidence in the economy appears to have been halted, at least for the time being. The number of people thinking that the country as a whole will do well in the coming year has risen from 18 to 20 per cent since last month, with a similar drop in those thinking the economy will do badly, from 79 to 77 per cent.

These changes are still within the margin of error however and the net balance (of optimists less pessimists) is minus 57 points, the second lowest ever.

There remains a record gap between confidence about the economy as a whole and about family prospects. This month more people think that they and their families will do well in the next year (49 per cent) than badly (48 per cent). The net balance of plus 1 compares with minus 4 points last month.

Women are, as usual, more pessimistic than men by a big margin. Professionals and managers are more optimistic about their family prospects, a net plus of 22 points compared with big minuses for other groups.

David Cameron has opened up a sizeable lead over Mr Brown as the best Prime Minister to handle the recession and to lead Britain forward after the next election. In November Mr Brown was ahead of Mr Cameron by 52 to 32 per cent as the right leader to deal with the British economy in recession. They were level pegging last month but Mr Cameron is ahead by 41 to 32 per cent.

Mr Cameron has widened his margin as the right leader to take Britain forward after the next election from 42 to 35 per cent in November, and 43 to 31 per cent in January, to 45 to 28 per cent now.

The personal ratings of Mr Brown however have recovered somewhat from their low point of July, reflecting the continuing impact of his handling of the banking crisis in the autumn, despite the fall in Labour’s ratings. The number of people thinking that Mr Brown is strong has jumped 22 points to 51 per cent, against a 20 point drop to 47 per cent in the number seeing him as weak. Mr Cameron is ahead on 63 per cent however, up 6 points since July.

The same is true of most other measures. There has been a 17 point jump to 42 per cent in the number believing that Mr Brown is up to the job of Prime Minister but 54 per cent (down 18 per cent) still believe that he is not up to the job. Mr Cameron remains ahead on 55 per cent.

More than half of those questioned however believe that neither leader knows what to do about the economic problems in Britain(55 per cent for Mr Brown and 51 per cent for Mr Cameron) and only just over two-fifths think they have clear ideas (43 and 44 per cent respectively).

The Tories’ image continues to be more favourable on nearly all measures, such as having a good team of leaders, and being competent and capable. The number of people seeing the Tories as united has fallen from 60 to 49 per cent since September however, while Labour’s rating is up from 23 to 34 per cent. The Lib Dems are ahead on unity at 52 per cent.

Populus interviewed a random sample of 1,504 adults aged over 18 by telephone between February 6 to 8. Interviews were conducted across the country and the results have been weighted to be representative of all adults.

For more details see www.populus.co.uk

Times Recommends

• Fern Britton: 'I still can't see that I was wrong'
• Extreme cooking
• Easy French: Tarte Tatin