LONDON—Britain's long-anticipated national election was set Tuesday for May 6, kicking off an intense 30-day battle between two major parties with sharply different plans to fix the U.K's battered economy and giant deficit.

It's also an unusual battle in which the favored opposition Tories, led by David Cameron, must win big to avoid losing. Outpolling Prime Minister Gordon Brown's ruling Labour Party by less than around 10 points could lead to a so-called hung parliament, in which no party gains a working majority.

A...