Nick Clegg promised to spark a new beginning for the Liberal Democrats today and the "beginning of the country's liberal future".
Accepting the Lib Dem leadership, the 40-year-old MP for Sheffield Hallam said the party would now be driven by ambition and the need for change.
In an acceptance speech that stressed his liberal beliefs, already set out in his two-month leadership campaign, Mr Clegg promised to fix a "broken" politics which is "out of step" with people and the modern world.
But after winning the leadership contest by just 511 votes, it is unclear how much of a mandate the former home affairs spokesman can claim.
Notably, he received fewer votes in this latest leadership contest than his rival, Chris Huhne, polled in the last Liberal Democrat election in March 2006.
Although Mr Clegg entered the race as the pundits' favourite, a strong campaign by Mr Huhne saw Mr Clegg take the leadership by just 20,988 votes to 20,477.
Today Mr Clegg attempted to draw a line under his rivalry with Mr Huhne, insisting he could go back to being "colleagues" with the environment spokesman, who is now waiting to hear what position he will take in Mr Clegg's "shadow" Cabinet.
Setting out his vision for the third party, which has been accused of damaging infighting and volatile leadership, Mr Clegg said politics cannot be a "Westminster village freak show".
Instead he pledged a politics that was "open, accessible and helpful" and would return power to local communities.
The new Liberal Democrat leader pledged to spend at least one day a week campaigning outside outside Westminster and tomorrow will spend his first official engagement meeting with sixth form students in Rotherhithe, south London.
Mr Clegg also promised to hold regular town hall-style meetings and establish a network of "regular families" across the country to advise him on priority issues.
Warning the Liberal Democrats must break the "stifling grip of the two-party system," he said he "refused to believe the only alternative to a clapped out Labour government is a Conservative party which has no answers to the big issues."
Mr Clegg's appointment comes days after Tory leader David Cameron reached out to the liberal party to form a "progressive alliance" against government policy.
Today, however, the new leader showed little enthusiasm for working with the Conservatives, with all parties facing a possible hung parliament in 2009 or 2010.
Addressing party supporters in Covent Garden, Mr Clegg said: "Old left-right politics has broken down.
"Labour and the Conservatives are mutating into each other, united in defence of a system which has let the people down."
The Conservatives were nevertheless quick to welcome the new Liberal Democrat leader, with party chairman Caroline Spelman accused of 'love bombing' Mr Clegg.
In a statement, Ms Spelman said: "We hope that the Liberal Democrats under Mr Clegg will join us in putting pressure on the government to devolve power to local authorities, communities and individuals, in our opposition to ID cards and in our commitment to social justice and environmental progress."
The Tory chairman repeated calls for a progressive alliance to decentralise British politics.