Prime Minister Rishi Sunak ended long-running speculation Wednesday by announcing he was scrapping part of a massive high-speed rail scheme, during a keynote speech closing his ruling Conservatives' annual conference.

His much-anticipated address in northwest England effectively fired the starting gun on Britain's next general election campaign, with a vote widely expected to take place next year.

"I'm ending this long-running saga," Sunak told delegates to loud applause and cheering, confirming that he was cancelling the northern leg of the HS2 train line -- a highly contentious move that has overshadowed the yearly event.

"I'm cancelling the rest of the HS2 project and in its place we will reinvest every single penny, £36 billion ($43.6 billion), in hundreds of new transport projects in the north, in the Midlands, across the country," he told the Conservative party conference in Manchester, northwest England, a proposed terminus for the new rail link.

The 43-year-old UK leader faces a daunting challenge rallying the Tories to win the election -- due to occur by January 2025 at the latest, after several years of damaging scandals and deep economic woes.

The party, in power since 2010, has lagged behind the main Labour opposition in polls throughout Sunak's tenure. 

But signs that the gap could be narrowing have provided a glimmer of hope as the grassroots gathered.

Sunak continued a recent shift into campaign mode, upping attacks on Labour after a flurry of more populist policy announcements and pivots aimed at drawing dividing lines with the main opposition.

Unpopular decision

The decision to scrap HS2 is unpopular with some Tories.

Andy Street, mayor of the West Midlands region that encompasses Birmingham, is considering quitting in protest. 

He reportedly cancelled a planned trip abroad Wednesday to remain in Manchester for the announcement.

Sunak, who has been premier for nearly a year, characterised the decision as fiscally prudent due to spiralling costs.

"I say to those who backed the project in the first place, the facts have changed and the right thing to do when the facts change is to have the courage to change direction," he said.

He is trying to portray himself as a leader willing to take tough and sometimes unpopular decisions.

"I do things properly and carefully... but I'm also willing to do things that are bold, that are different," Sunak told ITV News on Tuesday.

The UK leader cited his recent softening of the pace of Britain's net-zero agenda and his plans for new "pro-motorist" policies as examples.

"I have a different approach to politics," he told Sky News in another pre-speech interview. "I think people have tired of politicians who are... focused on the easy way out, short-term decisions." 

But Sunak faces an uphill task convincing voters to stick with the Tories after 13 years and damaging periods of turmoil under his immediate predecessors, Liz Truss and Boris Johnson.

The worst cost-of-living crisis in a generation, driven by decades-high inflation and non-existent economic growth, as well as widespread industrial action, all add to the challenge.

Three imminent by-elections could lay bare the scale of the task ahead, with the Conservatives at risk of losing each one despite having won two of them in 2019.

Labour leads polls

Labour, which starts its annual conference in Liverpool this weekend, has in contrast enjoyed poll leads of more than 20 points this year.

Although several recent surveys show the gap shrinking, the party appears confident of a first return to government since Gordon Brown was prime minister in 2010.

New Savanta polling published Wednesday suggested its lead had rebounded to 19 points, up five from its last survey.

It also indicated that around a third of 2019 Conservative voters viewed Rishi Sunak as "incompetent", rising to nearly six in 10 when counting all respondents.

"Although the general rule of British general elections is 'always bet on the Conservatives', the reality is that they've run out of room," Richard Carr, an associate professor in public policy and strategy at Anglia Ruskin University, told AFP.

"Their agenda of talking about long-term decisions whilst engaging in easy choices that seem purely designed to appease the party base is barely coherent," added Carr, who edited a volume on the modern Conservative party.

"Faced by a Labour opposition which has got its act together, the most likely outcome is a significant election defeat."