Ed Miliband has declared he will relish the fight in the runup to the general election and defended his leadership in the face of negative polls and criticism from the former cabinet minister Lord Mandelson.

After Mandelson said Miliband's message on business was "confused", the Labour leader said he would listen to advice but that "continuity Labour" was not an option; the party could not carry on in the same vein as the last government.

He said he believed he could "defy the odds" and win next year's election, despite a YouGov survey for Prospect magazine suggesting six in 10 voters thought he was not up to the job of being prime minister.

The latest YouGov/Sun poll suggested Miliband was on track to win an overall majority, with about 38% of the vote, but he acknowledged it would be a "tough fight" to return Labour to power after one just term in opposition.

"I didn't take this job because I thought it would be a walk in the park; I fought for this job because I thought it was important and I thought I had something distinctive to say about how we can change this country, and I believe that more now than I did three and a half years ago," he said. "I relish the next 10 months, I relish the opportunity to fight for my vision for the country."

Miliband's comments came as he set out Labour's first plans for cuts to the welfare system, ending out-of-work benefits for roughly 100,000 18- to 21-year-olds and replacing them with a less costly means-tested payment dependent on training.

The move is designed to symbolise Labour's determination to reform welfare, making it more closely linked to what people pay in, as well as cutting the benefits bill by about £65m a year.

Miliband rejected Conservative claims that the changes would cost money, saying Labour was offering "big changes, not big spending". It has been welcomed by many Labour MPs but worried some on the left.

Neal Lawson, chairman of the left-leaning pressure group Compass, said Labour would never "win on who kicks down hardest on the poorest".

"In a world of increasing job insecurity and precariousness, conditionality makes less sense," he said. "More means testing just erodes the notion of universal social security when we need it more than ever. The young are the victims of this insecure, low-wage economy – now they are its double victims.

"Ed Miliband berated David Cameron at his last party conference for being 'strong at standing up to the weak, but he's always weak when it comes to standing up to the strong'. Ed was right then – he is wrong now."

Miliband was also criticised on Wednesday night by Mandelson, who served as a minister under Tony Blair and Gordon Brown.

On the BBC's Newsnight programme, Mandelson offered only lukewarm praise for the Labour leadership and suggested Miliband was taking the wrong path on business.

"In my view, he is the leader we have and therefore the leader I support and somebody who I believe is capable of leading the party to victory," Mandelson said.

He later added: "I think that he has confused the party's message on business. I think what he needs to do is to embrace that model of a market-based economy where we are supporting business success, but where we also want to see a socially inclusive society with principles of social justice where we're creating opportunities for people and leaning against inequalities of society in everything we do.

"He places a great deal of emphasis on the last of those positions – the social justice, the fairness, the leaning against inequality – and I think that's absolutely right for a Labour leader to do so. But he also has to balance that with an explanation of how we're going to bring about economic growth, how we're going to create jobs and how we're going to create conditions in Britain for business to grow, which he has a year to do."

In another intervention, the former home secretary Alan Johnson said he backed Miliband as leader 100% but suggested that connecting with people was not his greatest strength.

"Maybe [Ed] is not as able to connect as strongly as [his brother and former leadership contender] David can," he told the New Statesman. "It's not his strong point. I can't pretend that, knocking on doors, people come out and they're enthusiastic about Ed."

In a Guardian-ICM poll on Tuesday, the personal popularity of Miliband and the Liberal Democrat leader, Nick Clegg, slipped to the lowest levels ever recorded in the poll series.