Nick Clegg says his party has faced "testing times" in a message aimed at calming grassroots Lib Dem concerns.
In his New Year message to members, the deputy prime minister pledged to start 2011 with action on social mobility, civil liberties and the environment.
He also launched a renewed defence of the decision to break a pledge to oppose rises in student tuition fees.
And he insists he had delivered on "every single one and more" of the party's general election priorities.
In the message, sent from Spain, where he is celebrating Christmas with his wife Miriam's family, he told the Liberal Democrat membership: "Well, what a year! A white-knuckle election; a new coalition government; Liberals in power for the first time in 70 years.
"Just eight months ago we were campaigning on our four big manifesto priorities - fairer taxes; extra money for disadvantaged children in schools; a green, rebalanced economy; a new, open politics. And now we are delivering on every single one, and more."
He went on: "I don't want to pretend it has all been easy. These are testing times for the country and for our party too. Action to tackle the deficit, and the need to reform higher education, have forced us to take some incredibly difficult decisions.
"But that is government. And when we promised people that we were ready to govern, that is the commitment we made. I genuinely believe that the choices we are making will stand the test of time."
He says the decision to almost treble tuition fees, which saw the party break a pre-election pledge, was needed to retain "world-class" universities and protect poorer students.
And he says backing the Conservatives' package of public spending cuts would "make sure future generations are not saddled with the burden of our debt".
"And by showing people that [the] coalition can work, we can prove that plural, liberal politics is best for Britain," he told them.
He says he will start the year by concentrating on "three big changes" in addition to campaigning for a "yes" vote in May's referendum on changing the Westminster voting system to AV - a key concession won in the coalition negotiations.
He set out his priorities for 2011: "Radical reform of our political system and restoring our hard-won civil liberties; boosting social mobility so that no child is held back by the circumstances of his or her birth; and making sure the economic recovery is green and balanced, with opportunities spread across the whole country."
He concluded: "All of us are going to hear some people predict the worst for our party. The same people who have been underestimating the Liberal Democrats for as long as we have existed.
"But we prove them wrong at every single turn. The next 12 months will be no different, because we will continue to build the Liberal, fairer, greener Britain that we all believe in."